10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________

Form 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission file number 001-36050

Stock Building Supply Holdings, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	26-4687975
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8020 Arco Corporate Drive, Suite 400 Raleigh, North Carolina	27617
(Address of principal executive offices)	(Zip Code)

(919) 431-1000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes xNo o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares outstanding of the Registrant’s common stock, par value $0.01 per share, at October 27, 2014 was 26,176,056 shares.

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

Table of Contents to Form 10-Q

	PART I - FINANCIAL INFORMATION
Item 1	Unaudited Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2014 and 2013	2
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013	3
	Notes to Condensed Consolidated Financial Statements	4
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4	Controls and Procedures	21
	PART II - OTHER INFORMATION
Item 1	Legal Proceedings	22
Item 1A	Risk Factors	22
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3	Defaults Upon Senior Securities	22
Item 4	Mine Safety Disclosures	22
Item 5	Other Information	22
Item 6	Exhibits	23
	Signature	24

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PART I. FINANCIAL INFORMATION

ITEM 1    FINANCIAL STATEMENTS

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share amounts)	September 30, 2014			December 31, 2013
Assets
Current assets
Cash and cash equivalents	$	8,244		$	1,138
Restricted assets	956			460
Accounts receivable, net	130,624			111,285
Inventories, net	114,748			91,303
Costs in excess of billings on uncompleted contracts	10,163			7,921
Assets held for sale	—			2,363
Prepaid expenses and other current assets	11,818			9,332
Deferred income taxes	5,561			3,332
Total current assets	282,114			227,134
Property and equipment, net of accumulated depreciation	71,085			56,039
Intangible assets, net of accumulated amortization	23,099			24,789
Goodwill	7,186			7,186
Restricted assets	861			1,359
Other assets	1,878			2,033
Total assets	$	386,223		$	318,540
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	89,167		$	64,984
Accrued expenses and other liabilities	40,693			30,528
Income taxes payable	5,704			2,989
Current portion of restructuring reserve	998			1,594
Current portion of capital lease obligation	1,676			1,240
Billings in excess of costs on uncompleted contracts	1,798			1,599
Total current liabilities	140,036			102,934
Revolving line of credit	81,816			59,072
Long-term portion of capital lease obligation	6,176			6,011
Deferred income taxes	13,695			15,496
Other long-term liabilities	7,548			7,346
Total liabilities	249,271			190,859
Commitments and contingencies (Note 9)
Stockholders' equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding at September 30, 2014 and December 31, 2013	—			—
Common stock, $0.01 par value, 300,000,000 shares authorized, 26,176,056 and 26,112,007 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively	262			261
Additional paid-in capital	146,527			144,570
Retained deficit	(9,837		)	(17,150		)
Total stockholders' equity	136,952			127,681
Total liabilities and stockholders' equity	$	386,223		$	318,540

The accompanying notes are an integral part of these condensed consolidated financial statements.

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STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except share and per share amounts)	2014			2013			2014			2013
Net sales	$	354,060		$	328,468		$	978,629		$	891,847
Cost of goods sold	269,668			253,087			746,781			691,166
Gross profit	84,392			75,381			231,848			200,681
Selling, general and administrative expenses	73,665			66,931			211,878			188,458
Depreciation expense	1,681			1,456			4,790			4,716
Amortization expense	563			563			1,690			1,672
Impairment of assets held for sale	—			—			48			—
Public offering transaction-related costs	60			9,322			508			10,008
Restructuring expense	2			31			11			130
	75,971			78,303			218,925			204,984
Income (loss) from operations	8,421			(2,922		)	12,923			(4,303		)
Other income (expense)
Interest expense	(712		)	(892		)	(2,011		)	(3,150		)
Other income, net	197			200			610			596
Income (loss) from continuing operations before income taxes	7,906			(3,614		)	11,522			(6,857		)
Income tax expense	(2,972		)	(1,989		)	(4,417		)	(1,076		)
Income (loss) from continuing operations	4,934			(5,603		)	7,105			(7,933		)
Income from discontinued operations, net of income tax expense of $25, $54, $133 and $237, respectively	40			90			208			341
Net income (loss)	4,974			(5,513		)	7,313			(7,592		)
Redeemable Class B Senior Preferred stock deemed dividend	—			(363		)	—			(1,836		)
Income (loss) attributable to common stockholders	$	4,974		$	(5,876	)	$	7,313		$	(9,428	)
Weighted average common shares outstanding
Basic	25,733,833			19,813,209			25,713,688			15,718,667
Diluted	26,229,323			19,813,209			26,218,405			15,718,667
Basic income (loss) per share
Income (loss) from continuing operations	$	0.19		$	(0.30	)	$	0.27		$	(0.62	)
Income from discontinued operations	—			—			0.01			0.02
Net income (loss) per share	$	0.19		$	(0.30	)	$	0.28		$	(0.60	)
Diluted income (loss) per share
Income (loss) from continuing operations	$	0.19		$	(0.30	)	$	0.27		$	(0.62	)
Income from discontinued operations	—			—			0.01			0.02
Net income (loss) per share	$	0.19		$	(0.30	)	$	0.28		$	(0.60	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Nine Months Ended September 30,
(in thousands)	2014			2013
Cash flows from operating activities
Net income (loss)	$	7,313		$	(7,592	)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation expense	8,054			7,389
Amortization of intangible assets	1,690			1,672
Amortization of debt issuance costs	353			465
Deferred income taxes	(4,030		)	(3,723		)
Non-cash stock compensation expense	1,848			573
Impairment of assets held for sale	96			—
Gain on sale of property, equipment and real estate	(1,076		)	(270		)
Bad debt expense	417			1,316
Change in assets and liabilities
Accounts receivable	(19,756		)	(35,401		)
Inventories, net	(23,445		)	(20,598		)
Accounts payable	26,951			14,735
Other assets and liabilities	6,396			6,904
Net cash provided by (used in) operating activities	4,811			(34,530		)
Cash flows from investing activities
Purchases of property and equipment	(20,795		)	(2,574		)
Proceeds from sale of property, equipment and real estate	3,493			3,070
Change in restricted assets	2			3,223
Purchase of business	—			(2,373		)
Net cash (used in) provided by investing activities	(17,300		)	1,346
Cash flows from financing activities
Proceeds from revolving line of credit	1,046,220			961,160
Repayments of proceeds from revolving line of credit	(1,023,476		)	(973,305		)
Proceeds from issuance of common stock, net of offering costs	—			55,821
Other financing activities	(3,149		)	(2,657		)
Net cash provided by financing activities	19,595			41,019
Net increase in cash and cash equivalents	7,106			7,835
Cash and cash equivalents
Beginning of period	1,138			2,691
End of period	$	8,244		$	10,526

The accompanying notes are an integral part of these condensed consolidated financial statements.

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STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    Organization

Stock Building Supply Holdings, Inc. and its subsidiaries (the “Company,” “we,” “us” and “our”) distributes lumber and building materials to new construction and repair and remodeling contractors. Additionally, we provide solution-based services to our customers, including component design, product specification and installation management services.

Due to the seasonal nature of our industry, sales are usually lower in the first and fourth quarters than in the second and third quarters.

2.    Basis of Presentation

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The condensed consolidated balance sheet as of December 31, 2013 was derived from audited financial statements, but does not include all necessary disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed consolidated financial statements include all accounts of the Company and its subsidiaries and, in the opinion of management, include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These unaudited financial statements should be read in conjunction with the Company’s 2013 Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. All material intercompany accounts and transactions have been eliminated in consolidation.

Comprehensive income (loss)

Comprehensive income (loss) is equal to the net income (loss) for all periods presented.

Recently issued accounting pronouncements

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11"). The guidance requires entities to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss (“NOL”) carryforward or tax credit carryforward whenever the NOL or tax credit carryforward would be available to reduce the additional taxable income or tax due if the tax position is disallowed. This ASU requires entities to assess whether to net the unrecognized tax benefit with a deferred tax asset as of the reporting date. ASU 2013-11 became effective and was adopted by the Company in fiscal year 2014. As of September 30, 2014, the Company recognized $0.4 million of an unrecognized tax benefit as a reduction of its deferred tax asset for state tax NOL carryforwards in accordance with ASU 2013-11.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 provides a comprehensive revenue recognition model requiring companies to recognize revenue for the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 is effective for the Company's annual and interim periods beginning on January 1, 2017. Early application is not permitted. The guidance permits the use of either a retrospective or cumulative effect transition method. We have not yet selected a transition method and are currently evaluating the impact of the standard on our current accounting policies.

3.    Acquisitions

For all acquisitions, the Company allocates the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition. The market approach, which indicates value based on available market pricing for comparable assets, is utilized to estimate the fair value of inventory, property and equipment. The income approach, which indicates value based on the present value of future cash flows, is primarily used to value intangible assets. The cost approach, which estimates values by determining the current cost of replacing an asset with another of equivalent utility, is used, as appropriate, for certain assets for which the market and income approaches could not be applied due to the nature of the asset.

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Chesapeake Structural Systems

On April 8, 2013, Commonwealth Acquisition Holdings, LLC, a wholly-owned subsidiary of the Company, purchased certain assets and assumed certain liabilities of Chesapeake Structural Systems, Inc., Creative Wood Products, LLC and Chestruc, LLC (collectively “Chesapeake”) for an adjusted purchase price of $2.6 million. This amount included an initial holdback amount of $0.2 million, which was paid to the sellers during the nine months ended September 30, 2014. The acquisition provides the Company with component manufacturing capability to serve customers in the Central and Northern Virginia markets. The Company incurred transaction costs of $0 and $0.2 million during the three and nine months ended September 30, 2013, respectively, which are included in selling, general and administrative expenses on the condensed consolidated statements of operations. The impact of this acquisition on our operating results was not considered material for the reporting of pro forma financial information.

The Company acquired total assets of $3.1 million and assumed liabilities of $1.4 million. The assets acquired include a customer relationship intangible asset of $1.2 million. Goodwill of $0.7 million arising from the acquisition consists of expected synergies and cost savings from excess purchase price over identifiable intangible net assets, as well as intangible assets that do not qualify for separate recognition, such as assembled workforce. All of the goodwill from this transaction is expected to be deductible for income tax purposes.

4.    Discontinued Operations

During certain prior years, the Company ceased operations in certain geographic markets. The Company will have no further significant continuing involvement in sold operations and exited geographic markets. The cessation of operations in these markets has been treated as discontinued operations as the markets had distinguishable cash flows and operations that have been eliminated from ongoing operations. To determine if cash flows have been (or will be) eliminated from ongoing operations, we evaluate a number of qualitative and quantitative factors, including, but not limited to, proximity of a closing store to any remaining open stores and the potential sales migration from the closed store to any stores remaining open.

The operating results of the discontinued operations for the three and nine months endedSeptember 30,2014 and 2013 are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2014			2013			2014			2013
Net sales	$	—		$	—		$	—		$	—
Restructuring charges	(3		)	(7		)	(18		)	(25		)
Gain before income taxes	65			144			341			578
Income tax expense	(25		)	(54		)	(133		)	(237		)
Net income	40			90			208			341

The assets and liabilities of discontinued operations reflected on the consolidated balance sheets at September 30, 2014 and December 31, 2013 are as follows:

(in thousands)	September 30,   2014		December 31,   2013
Real estate held for sale	$	—	$	700
Prepaid expenses and other current assets	7		8
Current assets of discontinued operations	7		708
Accrued expenses and other liabilities	265		37
Current portion of restructuring reserve	141		295
Current liabilities of discontinued operations	406		332
Long-term portion of restructuring reserve	—		89
Long-term liabilities of discontinued operations	$	—	$	89

5.    Restructuring Costs

In addition to discontinuing operations in certain markets, the Company instituted store closures and reductions in headcount in continuing markets (collectively, the “Restructurings”) in certain prior years in an effort to: (i) strengthen the Company’s competitive position; (ii) reduce costs and (iii) improve operating margins within existing markets that management believes have favorable long-term growth demographics. No additional costs, other than interest accretion, are expected to be incurred related to the Restructurings.

The following table summarizes the restructuring expenses incurred in connection with the Restructurings and the remaining reserves as of September 30, 2014:

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(in thousands)	Work Force Reductions			Store Closures			Total
Restructuring reserves, December 31, 2013	$	190		$	3,412		$	3,602
Restructuring charges incurred	—			29			29
Cash payments	(129		)	(1,366		)	(1,495		)
Restructuring reserves, September 30, 2014	$	61		$	2,075		$	2,136

The remaining accrual for work force reduction of $0.1 million is expected to be fully paid by January 2015. The remaining accrual for store closures of $2.1 million is expected to be fully paid by January 2017 as the related leases expire.

The restructuring reserve at September 30, 2014 consists of a current portion of $1.0 million and a long-term portion of $1.1 million. The long-term portion is included in other long-term liabilities on the consolidated balance sheets.

6.    Accounts Receivable

Accounts receivable consist of the following at September 30, 2014 and December 31, 2013:

(in thousands)	September 30,   2014			December 31,   2013
Trade receivables	$	135,556		$	115,876
Allowance for doubtful accounts	(2,501		)	(2,707		)
Allowance for sales returns and discounts	(2,431		)	(1,884		)
	$	130,624		$	111,285

7.    Secured Credit Agreement

On June 30, 2009, the Company entered into a Secured Credit Agreement (the “Credit Agreement”) with Wells Fargo Capital Finance ("WFCF"), which includes a revolving line of credit (the “Revolver”). The Revolver was amended during 2013 and 2014 for changes in financial covenants, maximum availability, maturity date and interest rate. The following is a summary of the significant terms of the Revolver as of September 30, 2014:

Maturity	December 31, 2017
Interest/Usage Rate	Company’s option of Base Rate(a) plus a Base Rate Margin (ranges from 0.50%–1.00% based on Revolver availability) or London Inter Bank Offered Rate ("LIBOR") plus a LIBOR Rate Margin (ranges from 1.50%–2.00% based on Revolver availability)
Maximum Availability	Lesser of $200 million or the borrowing base(b)
Periodic Principal Payments	None

(a) Base Rate is the higher of (i) the Federal Funds Rate plus 0.5% or (ii) the prime rate.

(b) The Revolver’s borrowing base is calculated as the sum of (i) 85% of the Company’s eligible accounts receivable plus (ii) the lesser of 90% of the eligible credit card receivables and $5 million plus (iii) the lesser of $150 million, 65% of the eligible inventory or 85% of the net liquidation value of eligible inventory as defined in the Credit Agreement plus (iv) the lesser of $30 million, 85% of the net liquidation value of eligible fixed assets or the net book value of fixed assets, all as defined in the Credit Agreement, minus (v) reserves from time to time set by the administrative agent. The Company’s borrowing base can also be increased pursuant to certain terms outlined in the Credit Agreement.

The Credit Agreement provides that the Company can use the Revolver availability to issue letters of credit. The fees on any outstanding letters of credit issued under the Revolver include a participation fee equal to the LIBOR Rate Margin. The fee on the unused portion of the Revolver is 0.25%. The Revolver includes a financial covenant that requires the Company to maintain a minimum Fixed Charge Coverage Ratio of 1.00:1.00 as defined by the Credit Agreement. The Fixed Charge Coverage Ratio requirement is only applicable if the sum of (i) availability under the Revolver and (ii) qualified cash ("Adjusted Liquidity") is less than $20 million, and remains in effect until the date on which Adjusted Liquidity has been greater than or equal to $20 million

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for a period of 30 consecutive days. While there can be no assurances, based upon the Company’s forecast, the Company does not expect the financial covenants to become applicable during the year ending December 31, 2014.

The Company had outstanding borrowings of $81.8 million and $59.1 million with net availability of $100.4 million and $71.0 million as of September 30, 2014 and December 31, 2013, respectively. The interest rate on outstanding LIBOR Rate borrowings of $81.0 million was 1.7% and the interest rate on outstanding Base Rate borrowings of $0.8 million was 3.8% as of September 30, 2014. The interest rate on outstanding LIBOR Rate borrowings of $52.0 million was 1.9% and the interest rate on outstanding Base Rate borrowings of $7.1 million was 4.0% as of December 31, 2013. The Company had $9.2 million and $8.9 million in letters of credit outstanding under the Credit Agreement as of September 30, 2014 and December 31, 2013, respectively. The Revolver is collateralized by substantially all assets of the Company. The carrying value of the Revolver at September 30, 2014 and December 31, 2013 approximates fair value as the Revolver contains a variable interest rate. As such, the fair value of the Revolver was classified as a Level 2 measurement in accordance with ASC 820.

8.    Income Taxes

The Company evaluates its deferred tax assets quarterly to determine if valuation allowances are required. In assessing the realizability of deferred tax assets, the Company considers both positive and negative evidence in determining whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company recognized valuation allowances of $1.7 million and $1.9 million against its deferred tax assets related to certain state tax jurisdictions as of September 30, 2014 and December 31, 2013, respectively. During the three and nine months endedSeptember 30, 2014, the Company reduced its valuation allowances by $0.1 million and $0.2 million, respectively, against deferred tax assets related to continuing operations. During the three and nine months endedSeptember 30, 2013, the Company recorded additional valuation allowances of $0.2 million against deferred tax assets related to continuing operations. To the extent the Company generates sufficient taxable income in the future to utilize the tax benefits of the net deferred tax assets on which a valuation allowance is recorded, the effective tax rate may decrease as the valuation allowance is reversed. The Company is not permitted to carry back any of its existing tax net operating losses related to certain state tax jurisdictions; therefore, to the extent the Company generates future tax net operating losses, the Company may be required to increase the valuation allowance on net deferred tax assets, which may increase the effective tax rate.

For the three and nine months endedSeptember 30, 2014, the Company’s effective income tax rate including discontinued operations and other discrete items was 37.6% and 38.4%, respectively, which varied from the federal statutory rate of 35% primarily due to state taxes. For the three and nine months endedSeptember 30, 2013, the Company’s effective income tax rate including discontinued operations and other discrete items was (58.9)% and (20.9)%, respectively, which varied from the federal statutory rate of 35% primarily due to the non-deductibility of the termination fee of $9.0 million related to our management services agreement with The Gores Group, LLC (“Gores”) (the "Gores Termination Fee") and of certain capitalized costs.

The effective income tax rate on continuing operations for the three months ended September 30, 2014 was 37.6% compared to an effective income tax rate on continuing operations of (55.0)% for the three months ended September 30, 2013. The effective income tax rate on continuing operations for the nine months endedSeptember 30, 2014 was 38.3% compared to an effective income tax rate on continuing operations of (15.7)% for the nine months endedSeptember 30, 2013. The increase in the tax rates for the comparative three-month and nine-month periods is primarily due to the adverse effect of the non-deductible Gores Termination Fee and of certain capitalized costs creating tax expense against the Company's pre-tax losses for the three months and nine months ended September 30, 2013.

As of September 30, 2014, the Company has recognized a liability for uncertain tax positions of $2.9 million within accrued expenses and other liabilities on the condensed consolidated balance sheets related to the deductibility of certain management service fees. The Company anticipates that it is reasonably possible that the total unrecognized tax benefits may be settled and recognized within the next twelve months, which could impact the effective tax rate. The Company did not have material uncertain tax positions as of December 31, 2013.

9.    Commitments and Contingencies

From time to time, various claims, legal proceedings and litigation are asserted or commenced against the Company principally arising from alleged product liability, warranty, casualty, construction defect, contract, tort, employment and other disputes. In determining loss contingencies, management considers the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when it is considered probable that such a liability has been incurred and when the amount of loss can be reasonably estimated. It is not certain that the Company will prevail in these matters. However,

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the Company does not believe that the ultimate outcome of any pending matters will have a material adverse effect on its consolidated financial position, results of operations or cash flows.

10.    Stock Based Compensation

The following table highlights the expense related to stock based compensation for the three and nine months endedSeptember 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2014		2013		2014		2013
Nonvested stock	$	263	$	171	$	651	$	307
Stock options	537		129		1,072		257
Restricted stock units	68		9		125		9
Stock based compensation	$	868	$	309	$	1,848	$	573

The following is a summary of nonvested stock, restricted stock unit and stock option activity for the nine months endedSeptember 30, 2014:

	Nonvested Stock				Restricted Stock Units				Stock Options
	Number of Shares Outstanding		Weighted Average Grant Date Fair Value		Number of Units Outstanding		Weighted Average Grant Date Fair Value		Number of Options Outstanding		Weighted Average Exercise Price
December 31, 2013	427,993		$	15.72	10,000		$	13.96	714,484		$	9.98
Granted	44,245		20.34		11,124		18.39		362,939		20.29
Vested/exercised	(35,566	)	4.62		(5,000	)	13.96		(14,804	)	0.97
Forfeited	—		—		—		—		(27,000	)	14.00
September 30, 2014	436,672		$	17.09	16,124		$	17.02	1,035,619		$	13.62

11.    Segments

ASC 280, Segment Reporting, defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company's operating segments consist of the East and West divisions along with Coleman Floor, which offers professional flooring installation services. Due to the similar economic characteristics, nature of products, distribution methods and customers, the Company has aggregated our East and West operating segments into one reportable segment, "Geographic divisions."

In addition to our reportable segment, the Company's consolidated results include "Coleman Floor" and "Other reconciling items." Other reconciling items is comprised of our corporate activities.

The following tables present Net Sales, Adjusted EBITDA and certain other measures for the reportable segment and total continuing operations for the three and nine months endedSeptember 30, 2014 and 2013.

	Three Months Ended September 30, 2014									September 30,   2014
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA			Total Assets
Geographic divisions	$	338,998	$	81,844	$	2,963	$	21,684		$	350,891
Coleman Floor	15,062		2,548		30		208			9,966
Other reconciling items	—		—		305		(8,684		)	25,366
	$	354,060	$	84,392	$	3,298				$	386,223

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	Three Months Ended September 30, 2013
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	315,918	$	72,908	$	2,829	$	16,757
Coleman Floor	12,550		2,473		28		581
Other reconciling items	—		—		175		(6,898		)
	$	328,468	$	75,381	$	3,032

	Nine Months Ended September 30, 2014
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	938,841	$	224,964	$	8,927	$	51,872
Coleman Floor	39,788		6,884		84		(389		)
Other reconciling items	—		—		733		(25,225		)
	$	978,629	$	231,848	$	9,744

	Nine Months Ended September 30, 2013
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	857,101	$	193,526	$	8,377	$	36,129
Coleman Floor	34,746		7,155		93		1,405
Other reconciling items	—		—		588		(19,289		)
	$	891,847	$	200,681	$	9,058

Reconciliation to consolidated financial statements:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2014			2013			2014			2013
Net income (loss), as reported	$	4,974		$	(5,513	)	$	7,313		$	(7,592	)
Interest expense	712			892			2,011			3,150
Income tax expense	2,972			1,989			4,417			1,076
Depreciation and amortization	3,298			3,032			9,744			9,058
Impairment of assets held for sale	—			—			48			—
Public offering transaction-related costs	60			9,322			508			10,008
Restructuring expense	2			31			11			130
Discontinued operations, net of taxes	(40		)	(90		)	(208		)	(341		)
Management fees	37			239			126			1,205
Non-cash compensation expense	868			309			1,848			573
Acquisition costs	—			—			—			257
Severance and other items related to store closures	325			229			440			721
Adjusted EBITDA of Coleman Floor	(208		)	(581		)	389			(1,405		)
Adjusted EBITDA of other reconciling items	8,684			6,898			25,225			19,289
Adjusted EBITDA of geographic divisions reportable segment	$	21,684		$	16,757		$	51,872		$	36,129

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12.    Income (Loss) Per Common Share

Basic net income (loss) per share (“EPS”) is calculated by dividing net income (loss) attributable to common stockholders by the weighted average shares outstanding during the period. Diluted EPS is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. For purposes of the diluted EPS calculation, stock options, nonvested stock and restricted stock unit awards are considered to be potential common shares. During periods of net income, participating securities are allocated a proportional share of net income determined by dividing total weighted average participating securities by the sum of total weighted average common shares and participating securities (“the two-class method”). During periods of net loss, no effect is given to participating securities since they do not share in the losses of the Company.

The basic and diluted EPS calculations for the three and nine months endedSeptember 30, 2014 and 2013 are presented below:

Basic EPS

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands, except share and per share amounts)	2014		2013			2014		2013
Income (loss) from continuing operations	$	4,934	$	(5,603	)	$	7,105	$	(7,933	)
Redeemable Class B Senior Preferred stock deemed dividend	—		(363		)	—		(1,836		)
Income (loss) attributable to common stockholders, from continuing operations	4,934		(5,966		)	7,105		(9,769		)
Income from discontinued operations, net of tax	40		90			208		341
Income (loss) attributable to common stockholders	$	4,974	$	(5,876	)	$	7,313	$	(9,428	)
Weighted average outstanding shares of common stock	25,733,833		19,813,209			25,713,688		15,718,667
Basic EPS
Income (loss) from continuing operations	$	0.19	$	(0.30	)	$	0.27	$	(0.62	)
Income from discontinued operations	—		—			0.01		0.02
Net income (loss) per share	$	0.19	$	(0.30	)	$	0.28	$	(0.60	)

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Diluted EPS

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands, except share and per share amounts)	2014		2013			2014		2013
Income (loss) from continuing operations	$	4,934	$	(5,603	)	$	7,105	$	(7,933	)
Redeemable Class B Senior Preferred stock deemed dividend	—		(363		)	—		(1,836		)
Income (loss) attributable to common stockholders, from continuing operations	4,934		(5,966		)	7,105		(9,769		)
Income from discontinued operations, net of tax	40		90			208		341
Income (loss) attributable to common stockholders	$	4,974	$	(5,876	)	$	7,313	$	(9,428	)
Weighted average outstanding shares of common stock	25,733,833		19,813,209			25,713,688		15,718,667
Effect of dilutive securities:
Nonvested stock	357,177		—			359,941		—
Stock options	133,604		—			140,395		—
Restricted stock units	4,709		—			4,381		—
Weighted average shares and dilutive shares	26,229,323		19,813,209			26,218,405		15,718,667
Diluted EPS
Income (loss) from continuing operations	$	0.19	$	(0.30	)	$	0.27	$	(0.62	)
Income from discontinued operations	—		—			0.01		0.02
Net income (loss) per share	$	0.19	$	(0.30	)	$	0.28	$	(0.60	)

The following table provides the securities that could potentially dilute basic earnings per share in the future, but were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Stock options	823,566	689,713	820,517	689,713
Nonvested stock	44,245	618,319	44,245	618,319
Restricted stock units	—	10,000	—	10,000

13.    Subsequent Events

During October 2014, the Company entered into a contract to purchase a facility that it currently leases. Of the $14.8 million total purchase price, $0.8 million was paid as a deposit in October 2014 with the balance due upon closing of the transaction, which is expected to occur in the fourth quarter of 2014 or the first quarter of 2015. The deposit is fully refundable through the end of the Company's inspection period and partially refundable thereafter until the closing, at which time the entire deposit will be applied to the purchase price.

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ITEM 2    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read this discussion and analysis in conjunction with our historical consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements included in our 2013 Annual Report on Form 10-K. This discussion and analysis covers periods prior to our initial public offering ("IPO") and related transactions. As a result, the discussion and analysis of certain historical periods does not reflect the impact that the IPO, our conversion to a corporation and other related transactions have had and will continue to have on us. Our historical results may not be indicative of our future performance. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ from those anticipated in these forward-looking statements as a result of many factors. Our risk factors are set forth in “Part II, Item 1A. Risk Factors.”

Business and Executive Overview

We are a large, diversified lumber and building materials distributor and solutions provider that sells to new construction and repair and remodeling contractors. We carry a broad line of products and have operations throughout the United States. Our primary products are lumber & lumber sheet goods, millwork, doors, flooring, windows, structural components such as engineered wood products, trusses and wall panels and other exterior products. Additionally, we provide solution-based services to our customers, including design, product specification and installation management services. We serve a broad customer base, including large-scale production homebuilders, custom homebuilders and repair and remodeling contractors. We offer a broad range of products sourced through a strategic network of suppliers, which together with our various solution-based services, represent approximately 50% of the construction cost of a typical new home. By enabling our customers to source a significant portion of their materials and services from one supplier, we have positioned ourselves as the supply partner of choice for many of our customers.

We have operations in 14 states, which states accounted for approximately 58% of 2013 U.S. single-family housing permits according to the U.S. Census Bureau. In these 14 states, we operate in 21 metropolitan areas that we believe have an attractive potential for economic growth based on population trends and above-average employment growth.

Our net sales for the three months ended September 30, 2014increased7.8% compared to the prior year period. We estimate sales increased8.0% due to volume and decreased0.2% due to commodity price deflation. Our gross profit as a percentage of net sales ("gross margin") was 23.8% for the three months ended September 30, 2014 compared to 22.9% for the prior year period. We recorded income from operations of $8.4 million during the three months ended September 30, 2014, compared to a loss from operations of $2.9 million during the three months ended September 30, 2013. For further discussion, see “-Operating Results.”

Factors Affecting Our Operating Results

Our operating results and financial performance are influenced by a variety of factors, including, among others, conditions in the housing market and economic conditions generally, changes in the cost of the products we sell (particularly commodity products), pricing policies of our competitors, production schedules of our customers and seasonality. Some of what we believe to be the more important factors are briefly discussed below.

Conditions in the housing and construction market

The building products supply and services industry is highly dependent on new home construction and repair and remodeling activity, which in turn are dependent upon a number of factors, including interest rates, consumer confidence, employment rates, foreclosure rates, housing inventory levels, housing demand, the availability of land, the availability of construction financing and the health of the economy and mortgage markets. According to the U.S. Census Bureau, single-family housing starts increased approximately 7.2% for the three months ended September 30, 2014 as compared to the same period in the prior year, while single-family houses under construction as of September 30, 2014increased8.0% as compared to September 30, 2013.

Overall economic conditions in the markets where we operate

Economic changes both nationally and locally in our markets impact our financial performance. Unfavorable changes in demographics, credit markets, consumer confidence, health care costs, housing affordability, housing inventory levels, a weakening of the national economy or of any regional or local economy in which we operate and other factors beyond our control could adversely affect consumer spending, result in decreased demand for homes and adversely affect our business. We believe continued employment growth, prospective home buyers’ access to financing and improved consumer confidence will be necessary to increase household formation rates. We believe improved household formation rates in turn should increase demand for housing and stimulate new construction.

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Commodity nature of our products

Many of the building products we distribute, including lumber, oriented strand board ("OSB"), plywood and particleboard, are commodities that are widely available from other manufacturers or distributors with prices and volumes determined frequently based on participants’ perceptions of short-term supply and demand factors.

The following table reflects changes in average composite framing lumber prices (per thousand board feet) and average composite structural panel prices (per thousand square feet). These prices represent transactions between manufacturers and their customers as reported by Random Lengths and may differ in magnitude or timing from the actual selling prices or cost of goods reported in our operating results. The average composite structural panel prices are based on index prices for OSB and plywood.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014 versus 2013		2014 average price		2014 versus 2013		2014 average price
Change in framing lumber prices	11	%	$	392	1	%	$	385
Change in structural panel prices	5	%	$	402	(15	)%	$	379

Periods of increasing prices provide the opportunity for higher sales and increased gross profit, while periods of declining prices may result in declines in sales and profitability. In particular, low market prices for wood products over a sustained period can adversely affect our financial condition, operating results and cash flows, as can excessive spikes in market prices. For further discussion of the impact of commodity prices on historical periods, see “-Operating Results.”

Consolidation of large homebuilders

Over the past ten years, the homebuilding industry has undergone consolidation and many larger homebuilders have increased their market share. We expect that trend to continue as larger homebuilders have better liquidity and land positions relative to the smaller, less capitalized homebuilders. Our focus is on maintaining relationships and market share with these customers while balancing the competitive pressures we face in our markets with certain profitability expectations. While we generate significant sales from these homebuilders, our gross margins on sales to them tend to be lower than our gross margins on sales to other market segments. This could impact our gross margins as homebuilding recovers if the market share held by the production homebuilders continues to increase.

Our ability to control expenses

We pay close attention to managing our working capital and operating expenses. We employ a LEAN process operating philosophy, which encourages continuous improvement in our core processes to minimize waste, improve customer service, increase expense productivity, improve working capital and maximize profitability and cash flow. We regularly analyze our workforce productivity to achieve the optimum, cost-efficient labor mix for our facilities. Further, we pay careful attention to our logistics function and have implemented GPS-based technology to improve customer service and improve productivity of our shipping and handling costs.

Mix of products sold

We typically realize greater gross margins on more highly engineered and customized products, or ancillary products that are often purchased based on convenience and are therefore less price sensitive to our customers. For example, sales of lumber & lumber sheet goods tend to generate lower gross margins due to their commodity nature and the relatively low switching costs of sourcing those products from different suppliers. Structural components and millwork & other interior products often generate higher gross margins relative to other products. Homebuilders often use structural components in order to realize increased efficiency and improved quality. We believe shortening cycle time from start to completion is a key goal of homebuilders during periods of strong consumer demand or limited availability of framing labor. As the residential new construction market continues to strengthen, we expect the use of structural components by homebuilders to increase.

Changes in sales mix among construction segments

Our operating results may vary according to the amount and type of products we sell to each of our four primary construction segments: new single-family construction; remodeling; multi-family and light commercial. We tend to realize higher gross margins on sales to the remodeling segment due to the smaller product volumes purchased by those customers, as well as the more customized nature of the projects those customers generally undertake. Gross margins within the new single-family, multi-family and light commercial construction segments can vary based on a variety of factors, including the purchase volumes of the individual customer,

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the mix of products sold to that customer, the size and selling price of the project being constructed and the number of upgrades added to the project before or during its construction. 

Operating Results

The following table sets forth our operating results in dollars and as a percentage of net sales for the periods indicated:

	Three Months Ended September 30,										Nine Months Ended September 30,
(in thousands)	2014					2013					2014					2013
Net sales	$	354,060		100.0	%	$	328,468		100.0	%	$	978,629		100.0	%	$	891,847		100.0	%
Cost of goods sold	269,668			76.2	%	253,087			77.1	%	746,781			76.3	%	691,166			77.5	%
Gross profit	84,392			23.8	%	75,381			22.9	%	231,848			23.7	%	200,681			22.5	%
Operating expenses:
Selling, general and administrative expenses	73,665			20.8	%	66,931			20.4	%	211,878			21.7	%	188,458			21.1	%
Depreciation expense	1,681			0.5	%	1,456			0.4	%	4,790			0.5	%	4,716			0.5	%
Amortization expense	563			0.2	%	563			0.2	%	1,690			0.2	%	1,672			0.2	%
Impairment of assets held for sale	—			0.0	%	—			0.0	%	48			0.0	%	—			0.0	%
Public offering transaction-related costs	60			0.0	%	9,322			2.8	%	508			0.1	%	10,008			1.1	%
Restructuring expense	2			0.0	%	31			0.0	%	11			0.0	%	130			0.0	%
Income (loss) from operations	8,421			2.4	%	(2,922		)	(0.9	)%	12,923			1.3	%	(4,303		)	(0.5	)%
Other income (expense)
Interest expense	(712		)	(0.2	)%	(892		)	(0.3	)%	(2,011		)	(0.2	)%	(3,150		)	(0.4	)%
Other income, net	197			0.1	%	200			0.1	%	610			0.1	%	596			0.1	%
Income (loss) from continuing operations before income taxes	7,906			2.2	%	(3,614		)	(1.1	)%	11,522			1.2	%	(6,857		)	(0.8	)%
Income tax expense	(2,972		)	(0.8	)%	(1,989		)	(0.6	)%	(4,417		)	(0.5	)%	(1,076		)	(0.1	)%
Income (loss) from continuing operations	4,934			1.4	%	(5,603		)	(1.7	)%	7,105			0.7	%	(7,933		)	(0.9	)%
Income from discontinued operations, net of income tax expense of $25, $54, $133 and $237, respectively	40			0.0	%	90			0.0	%	208			0.0	%	341			0.0	%
Net income (loss)	$	4,974		1.4	%	$	(5,513	)	(1.7	)%	$	7,313		0.7	%	$	(7,592	)	(0.9	)%

Three months ended September 30, 2014 compared to three months ended September 30, 2013

Net sales

For the three months ended September 30, 2014, net sales increased$25.6 million, or 7.8%, to $354.1 million from $328.5 million during the three months ended September 30, 2013. The increase in net sales was primarily driven by increased volume of approximately 8.0%, while the impact of commodity price deflation decreased net sales by approximately 0.2%. We estimate approximately 73% of our net sales for the three months ended September 30, 2014 were to customers engaged in new single-family construction. According to the U.S. Census Bureau, single-family housing starts increased approximately 7.2% for the three months ended September 30, 2014 as compared to the same period in the prior year, while single-family houses under construction as of September 30, 2014increased8.0% as compared to September 30, 2013. Increases in net sales from North Carolina, Texas and California represented approximately 95% of the total net sales increase for the three months ended September 30, 2014 as compared to the prior year period.

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The following table shows net sales classified by major product category:

	Three Months Ended   September 30, 2014				Three Months Ended   September 30, 2013
(in thousands)	Net Sales		% of Sales		Net Sales		% of Sales		% Change
Structural components	$	49,163	13.9	%	$	46,335	14.1	%	6.1	%
Millwork & other interior products	64,821		18.3	%	58,215		17.7	%	11.3	%
Lumber & lumber sheet goods	123,116		34.8	%	114,147		34.8	%	7.9	%
Windows & other exterior products	73,626		20.8	%	71,463		21.8	%	3.0	%
Other building products & services	43,334		12.2	%	38,308		11.6	%	13.1	%
Total net sales	$	354,060	100.0	%	$	328,468	100.0	%	7.8	%

Increased sales volume was achieved across all product categories. Average selling prices for lumber & lumber sheet goods were approximately 0.7%lower during the three months ended September 30, 2014 compared to the three months ended September 30, 2013.

Cost of goods sold

For the three months ended September 30, 2014, cost of goods sold increased$16.6 million, or 6.6%, to $269.7 million from $253.1 million during the three months ended September 30, 2013. We estimate our cost of goods sold increased approximately 7.2% as a result of increased sales volumes, while commodity cost deflation resulted in a 0.6%decrease in cost of goods sold.

Gross profit

For the three months ended September 30, 2014, gross profit increased$9.0 million, or 12.0%, to $84.4 million from $75.4 million for the three months ended September 30, 2013, driven primarily by increased sales volumes. Our gross margin was 23.8% for the three months ended September 30, 2014 and 22.9% for the three months ended September 30, 2013. This increase was primarily driven by improved gross margins on sales of structural components and lumber & lumber sheet goods and increases in supplier consideration due to higher purchase volumes.

Operating expenses

For the three months ended September 30, 2014, selling, general and administrative expenses increased$6.8 million, or 10.1%, to $73.7 million, or 20.8% of net sales, from $66.9 million, or 20.4% of net sales, for the three months ended September 30, 2013. Variable costs to serve higher sales volumes, such as sales commissions, shipping and handling costs and other variable compensation, increased by $1.7 million in the aggregate. Other salary, wage, benefit and employer taxation costs increased $4.2 million, primarily as a result of headcount additions to serve higher sales volume and generate future growth opportunities and increases in self-insured health costs and stock compensation expense.

For the three months ended September 30, 2013, the Company incurred $9.3 million of non-capitalizable costs associated with our IPO, which included a $9.0 million fee for terminating our management services agreement with Gores.

Other income (expenses)

Interest expense. For the three months ended September 30, 2014, interest expense was $0.7 million compared to $0.9 million for the three months ended September 30, 2013. This decrease relates primarily to a decrease in Revolver borrowings and lower average borrowing rates in 2014.

Income tax from continuing operations

For the three months ended September 30, 2014, income tax expense from continuing operations was $3.0 million compared to $2.0 million for the three months ended September 30, 2013. The effective tax rate from continuing operations for the three months ended September 30, 2014 was 37.6% compared to (55.0)% for the three months ended September 30, 2013. The change in the tax rate from continuing operations is primarily due to the adverse effect of the non-deductible Gores Termination Fee and of certain capitalized costs creating tax expense against the Company's pre-tax loss for the three-months ended September 30, 2013.

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Nine months ended September 30, 2014 compared to nine months ended September 30, 2013

Net sales

For the nine months ended September 30, 2014, net sales increased$86.8 million, or 9.7%, to $978.6 million from $891.8 million during the nine months ended September 30, 2013. The increase in net sales was primarily driven by increased volume of approximately 11.5%, while the impact of commodity price deflation decreased net sales by approximately 1.8%. We estimate approximately 74% of our net sales for the nine months ended September 30, 2014 were to customers engaged in new single-family construction. According to the U.S. Census Bureau, single-family housing starts increased approximately 3.8% for the nine months ended September 30, 2014 as compared to the same period in the prior year, while single-family houses under construction as of September 30, 2014increased8.0% as compared to September 30, 2013. Increases in net sales from Texas, North Carolina and California represented approximately 76% of the total net sales increase for the nine months ended September 30, 2014 as compared to the prior year period.

The following table shows net sales classified by major product category:

	Nine Months Ended   September 30, 2014				Nine Months Ended   September 30, 2013
(in thousands)	Net Sales		% of Sales		Net Sales		% of Sales		% Change
Structural components	$	132,846	13.6	%	$	117,367	13.2	%	13.2	%
Millwork & other interior products	178,528		18.2	%	161,213		18.1	%	10.7	%
Lumber & lumber sheet goods	343,279		35.1	%	329,744		37.0	%	4.1	%
Windows & other exterior products	201,921		20.6	%	182,062		20.4	%	10.9	%
Other building products & services	122,055		12.5	%	101,461		11.3	%	20.3	%
Total net sales	$	978,629	100.0	%	$	891,847	100.0	%	9.7	%

Increased sales volume was achieved across all product categories. Average selling prices for lumber & lumber sheet goods were approximately 4.8%lower during the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013.

Cost of goods sold

For the nine months ended September 30, 2014, cost of goods sold increased$55.6 million, or 8.0%, to $746.8 million from $691.2 million during the nine months ended September 30, 2013. We estimate our cost of goods sold increased approximately 10.3% as a result of increased sales volumes, while commodity cost deflation resulted in a 2.3%decrease in cost of goods sold.

Gross profit

For the nine months ended September 30, 2014, gross profit increased$31.1 million, or 15.5%, to $231.8 million from $200.7 million for the nine months ended September 30, 2013, driven primarily by increased sales volumes. Our gross margin was 23.7% for the nine months ended September 30, 2014 and 22.5% for the nine months ended September 30, 2013. This increase was primarily driven by improved gross margins on sales of structural components and lumber & lumber sheet goods, a higher percentage of total net sales being derived from non-commodity product offerings and increases in supplier consideration due to higher purchase volumes.

Operating expenses

For the nine months ended September 30, 2014, selling, general and administrative expenses increased$23.4 million, or 12.4%, to $211.9 million, or 21.7% of net sales, from $188.5 million, or 21.1% of net sales, for the nine months ended September 30, 2013. Variable costs to serve higher sales volumes, such as sales commissions, shipping and handling costs and other variable compensation, increased by $8.8 million in the aggregate. Other salary, wage, benefit and employer taxation costs increased $11.6 million, primarily as a result of headcount additions to serve higher sales volume and generate future growth opportunities and increases in self-insured health costs and stock compensation expense. We estimate that general and administrative expenses increased by $1.2 million as a result of our transition to a public company.

For the nine months ended September 30, 2014, the Company incurred $0.5 million of public offering transaction-related costs primarily in connection with a secondary offering in which shares were sold by certain stockholders. The Company did not receive any proceeds from the offering. For the nine months ended September 30, 2013, the Company incurred $10.0 million of non-

16

capitalizable costs associated with our IPO, which included a $9.0 million fee for terminating our management services agreement with Gores.

Other income (expenses)

Interest expense. For the nine months ended September 30, 2014, interest expense was $2.0 million compared to $3.2 million for the nine months ended September 30, 2013. This decrease relates primarily to a decrease in Revolver borrowings and lower average borrowing rates in 2014.

Income tax from continuing operations

For the nine months ended September 30, 2014, income tax expense from continuing operations was $4.4 million compared to $1.1 million for the nine months ended September 30, 2013. The effective tax rate from continuing operations for the nine months ended September 30, 2014 was 38.3% compared to (15.7)% for the nine months ended September 30, 2013. The change in the tax rate from continuing operations is primarily due to the adverse effect of the non-deductible Gores Termination Fee and of certain capitalized costs creating tax expense against the Company's pre-tax loss for the nine months ended September 30, 2013.

Liquidity and Capital Resources

Our primary capital requirements are to fund working capital needs and operating expenses, meet required interest and principal payments and fund capital expenditures. During 2013 and the first nine months of 2014, our capital resources have primarily consisted of cash and cash equivalents, borrowings under our Revolver and proceeds from our IPO.

Our liquidity at September 30, 2014 was $108.6 million, which includes $8.2 million in cash and cash equivalents and $100.4 million of unused borrowing capacity under our Revolver.

We believe that our cash flows from operations, combined with our current cash levels, and available borrowing capacity, will be adequate to fund debt service requirements and provide cash, as required, to support our ongoing operations, capital expenditures, lease obligations and working capital for at least the next 12 months.

Historical Cash Flow Information

Adjusted working capital* and net current assets

Adjusted working capital was $132.9 million and $122.6 million as of September 30, 2014 and December 31, 2013, respectively, and net current assets (current assets less current liabilities) were $142.1 million and $124.2 million as of September 30, 2014 and December 31, 2013, respectively, as summarized in the following table:

(in thousands)	September 30, 2014			December 31, 2013
Accounts receivable, net	$	130,624		$	111,285
Inventories, net	114,748			91,303
Other current assets	27,542			22,948
Income taxes payable	(5,704		)	(2,989		)
Accounts payable, accrued expenses and other current liabilities	(134,332		)	(99,945		)
Total adjusted working capital*	132,878			122,602
Cash and cash equivalents	8,244			1,138
Restricted assets	956			460
Total net current assets	$	142,078		$	124,200

*Adjusted working capital is a non-GAAP financial measure that management uses to assess the Company’s financial position and liquidity. Management believes adjusted working capital provides investors with an additional view of the Company’s liquidity and ability to repay current obligations. We calculate adjusted working capital as current assets, as determined under GAAP, excluding cash and cash equivalents and restricted assets, minus current liabilities, as determined under GAAP, excluding the Revolver. The presentation of this additional information is not meant to be considered superior to, in isolation of or as a substitute for results prepared in accordance with GAAP or as an indication of our performance. Our calculation of adjusted working capital is not necessarily comparable to similarly titled measures reported by other companies.

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Accounts receivable, net, increased$19.3 million from December 31, 2013 to September 30, 2014 primarily due to seasonal increases in sales and days sales outstanding (measured against net sales in the current fiscal quarter of each period) was 33 days at December 31, 2013 and September 30, 2014.

Inventories, net, increased$23.4 million from December 31, 2013 to September 30, 2014 and inventory days on hand (measured against cost of goods sold in the current fiscal quarter of each period) increased from 36 days at December 31, 2013 to 38 days at September 30, 2014 primarily due to seasonal increases in inventory during the third quarter of 2014.

Income taxes payable increased$2.7 million from December 31, 2013 to September 30, 2014. Approximately $8.5 million of this increase related to year-to-date pre-tax earnings, which was offset by income tax payments, net of refunds, of $2.9 million and by the recognition of a liability for unrecognized tax benefits of $2.9 million.

Accounts payable, accrued expenses and other liabilities increased$34.4 million from December 31, 2013 to September 30, 2014 primarily due to an increase in the volume of inventory purchases.

Cash flows from operating activities

Net cash provided by (used in) operating activities was $4.8 million and $(34.5) million for the nine months ended September 30, 2014 and 2013, respectively, as summarized in the following table:

	Nine Months Ended September 30,
(in thousands)	2014			2013
Net income (loss)	$	7,313		$	(7,592	)
Non-cash expenses	11,382			11,145
Change in deferred income taxes	(4,030		)	(3,723		)
Change in working capital and other	(9,854		)	(34,360		)
Net cash provided by (used in) operating activities	$	4,811		$	(34,530	)

Net cash provided by (used in) operating activities increased by $39.3 million for the nine months ended September 30, 2014 as compared to the nine months ended September 30, 2013 primarily due to the following:

• Net income increased by $14.9 million as discussed in “-Operating Results,” above.

• Cash used in operating activities related to working capital and other declined by $24.5 million. The increase in accounts receivable during the nine months ended September 30, 2014 was $15.6 million lower than the prior year period due primarily to a smaller increase in net sales during the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. The increase in accounts payable during the nine months ended September 30, 2014 was $12.2 million higher than the prior year period due primarily to purchases of commodity inventory in excess of immediate needs in the fourth quarter of 2012, which reduced the seasonal increase in accounts payable for the nine months ended September 30, 2013.

Cash flows from investing activities

Net cash (used in) provided by investing activities was $(17.3) million and $1.3 million for the nine months endedSeptember 30, 2014 and 2013, respectively, as summarized in the following table:

	Nine Months Ended September 30,
(in thousands)	2014			2013
Purchases of property and equipment	$	(20,795	)	$	(2,574	)
Proceeds from sale of property, equipment and real estate	3,493			3,070
Change in restricted assets	2			3,223
Purchase of business	—			(2,373		)
Net cash (used in) provided by investing activities	$	(17,300	)	$	1,346

Cash used for the purchase of property and equipment for the nine months ended September 30, 2014 and 2013 resulted primarily from the purchase of vehicles and equipment to support increased sales volume and replace aged assets, and facility and technology investments to support our operations.

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Cash provided by the sale of property, equipment and real estate for the nine months ended September 30, 2014 and 2013 resulted primarily from the sale of real estate during those periods.

Cash provided by restricted assets during the nine months ended September 30, 2014 and 2013 resulted primarily from the release of escrow funds and excess deposits used to pre-fund expected losses for self-insured casualty and health claims incurred by the Company.

The Company acquired Chesapeake during the nine months ended September 30, 2013.

Cash flows from financing activities

Net cash provided by financing activities was $19.6 million and $41.0 million for the nine months ended September 30, 2014 and 2013, respectively, as summarized in the following table:

	Nine Months Ended September 30,
(in thousands)	2014			2013
Proceeds from issuance of common stock, net of offering costs	$	—		$	55,821
Proceeds from Revolver, net of repayments	22,744			(12,145		)
Payments on capital leases	(1,177		)	(1,195		)
Other financing activities, net	(1,972		)	(1,462		)
Net cash provided by financing activities	$	19,595		$	41,019

Proceeds from the Revolver were primarily used to fund purchases of property and equipment for the nine months ended September 30, 2014. During the nine months ended September 30, 2013, the Company used $46.2 million of proceeds from the IPO to pay down outstanding balances under the Revolver, and used proceeds from the Revolver to fund cash used in operating activities and purchases of property and equipment.

Other financing activities, net, for the nine months ended September 30, 2014 and 2013 consist primarily of secured borrowings and debt issuance costs, and the payment of a holdback amount related to the Chesapeake acquisition during the nine months ended September 30, 2014.

Capital expenditures

Capital expenditures vary depending on prevailing business factors, including current and anticipated market conditions. Historically, capital expenditures have for the most part remained at relatively low levels in comparison to the operating cash flows generated during the corresponding periods. We expect our 2014 capital expenditures to be approximately $45 to $55 million (including the incurrence of capital lease obligations) primarily related to vehicles and equipment, including lease buyouts, facility and technology investments to support our operations and the planned purchase of a currently leased facility for $14.8 million, assuming this transaction closes during the fourth quarter of 2014.

Revolving credit facility

On June 30, 2009, we entered into the Credit Agreement with WFCF, which includes the Revolver. The Credit Agreement has subsequently been amended eleven times. We were in compliance with all debt covenants for the quarter ended September 30, 2014. We are subject to a financial covenant requiring a minimum Fixed Charge Coverage Ratio of 1.00:1.00 if Adjusted Liquidity is less than $20 million. While there can be no assurances, based upon our forecast, we do not expect the financial covenant to become applicable during the year ended December 31, 2014.

We had outstanding borrowings of $81.8 million with net availability of $100.4 million as of September 30, 2014. The interest rate on outstanding LIBOR Rate borrowings of $81.0 million was 1.7% and the interest rate on outstanding Base Rate borrowings of $0.8 million was 3.8% as of September 30, 2014. We had $9.2 million in letters of credit outstanding under the Credit Agreement as of September 30, 2014. The Revolver is collateralized by substantially all of our assets.

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Contractual Obligations and Commercial Commitments

Outstanding borrowings under the Revolver increased to $81.8 million at September 30, 2014 from $59.1 million at December 31, 2013.

The Company has entered into contracts to purchase fleet and certain equipment, which are non-cancellable, enforceable and legally binding on us. As of September 30, 2014, these purchase obligations totaled $5.7 million. The Company expects to pay for these assets over the six-month period ending March 31, 2015.

During October 2014, the Company entered into a contract to purchase a facility that it currently leases. Of the $14.8 million total purchase price, $0.8 million was paid as a deposit in October 2014 with the balance due upon closing of the transaction, which is expected to occur in the fourth quarter of 2014 or the first quarter of 2015. The deposit is fully refundable through the end of the Company's inspection period and partially refundable thereafter until the closing, at which time the entire deposit will be applied to the purchase price.

Off-Balance Sheet Arrangements

At September 30, 2014 and December 31, 2013, other than operating leases and letters of credit issued under the Credit Agreement, we had no material off-balance sheet arrangements with unconsolidated entities.

Recently Issued Accounting Pronouncements

In July 2013, the FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The guidance requires entities to present an unrecognized tax benefit as a reduction of a deferred tax asset for an NOL carryforward or tax credit carryforward whenever the NOL or tax credit carryforward would be available to reduce the additional taxable income or tax due if the tax position is disallowed. This ASU requires entities to assess whether to net the unrecognized tax benefit with a deferred tax asset as of the reporting date. ASU 2013-11 became effective and was adopted by the Company in fiscal year 2014. As of September 30, 2014, the Company recognized $0.4 million of an unrecognized tax benefit as a reduction of its deferred tax asset for state tax NOL carryforwards in accordance with ASU 2013-11.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 provides a comprehensive revenue recognition model requiring companies to recognize revenue for the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 is effective for the Company's annual and interim periods beginning on January 1, 2017. Early application is not permitted. The guidance permits the use of either a retrospective or cumulative effect transition method. We have not yet selected a transition method and are currently evaluating the impact of the standard on our current accounting policies.

Critical Accounting Policies

There have been no significant material changes to the critical accounting policies as disclosed in the Company’s 2013 Annual Report on Form 10-K.

ITEM 3     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant material changes to the market risks as disclosed in the Company’s 2013 Annual Report on Form 10-K.

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ITEM 4    CONTROLS AND PROCEDURES

Disclosure controls and procedures

Our senior management is responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

We have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report, with the participation of our Chief Executive Officer and Chief Financial Officer, as well as other key members of our management. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2014.

Changes in internal control over financial reporting

There was no change in our internal control over financial reporting during the three months ended September 30, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1    LEGAL PROCEEDINGS

We are currently involved in various claims, legal proceedings and lawsuits incidental to the conduct of our business in the ordinary course. We are a defendant in various pending lawsuits, legal proceedings and claims arising from assertions of alleged product liability, warranty, casualty, construction defect, contract, tort, employment and other claims. We carry insurance in such amounts in excess of our self-insurance as we believe to be reasonable under the circumstances although insurance may or may not cover any or all of our liabilities in respect of claims and lawsuits. We do not believe that the ultimate resolution of these matters will have a material adverse effect on our consolidated financial position, cash flows or operating results.

ITEM 1A    RISK FACTORS

There have been no material changes in our risk factors from those disclosed in "Part I, Item 1A Risk Factors" in our 2013 Annual Report on Form 10-K. The risks described in our 2013 Annual Report on Form 10-K, in addition to the other information set forth in this report,are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3    DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4    MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5    OTHER INFORMATION

None.

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ITEM 6    EXHIBITS

EXHIBIT INDEX

Exhibit No.	Description
10.1	Amended and Restated Employment Agreement, dated as of October 9, 2014, between Stock Building Supply Holdings, Inc. and Jeffrey G. Rea (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 10, 2014).
10.2	Amended and Restated Employment Agreement, dated as of October 9, 2014, between Stock Building Supply Holdings, Inc. and James F. Major, Jr. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 10, 2014).
10.3	Amended and Restated Employment Agreement, dated as of October 9, 2014, between Stock Building Supply Holdings, Inc. and Bryan J. Yeazel (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 10, 2014).
10.4	Employment Agreement, dated as of October 9, 2014, between Stock Building Supply Holdings, Inc. and Lisa M. Hamblet
10.5	Employment Agreement, dated as of October 9, 2014, between Stock Building Supply Holdings, Inc. and C. Lowell Ball
31.1	Certification by Jeffrey G. Rea, President and Chief Executive Officer, pursuant to Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification by James F. Major, Jr., Executive Vice President, Chief Financial Officer and Treasurer, pursuant to Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

_________________

* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	STOCK BUILDING SUPPLY HOLDINGS, INC.
Date: October 28, 2014	By:	/s/ James F. Major, Jr.
		Executive Vice President, Chief Financial Officer and Treasurer
		(Principal financial and accounting officer and duly authorized officer)

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EX-10.4

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of October 9, 2014 (the “Effective Date”) between LISA M. HAMBLET (“Executive”) and STOCK BUILDING SUPPLY HOLDINGS, INC., a Delaware corporation (the “Company”).

RECITALS

WHEREAS, Executive is currently employed by the Company as its Executive Vice President for eBusiness,and is a party to that certain Severance Agreement dated December 16, 2013 with the Company (the “Prior Agreement”); and

WHEREAS, Executive and the Company desire to amend and restate the Prior Agreement in order to reflect certain modifications to the terms thereof and to set forth the terms and conditions of Executive’s ongoing employment with the Company.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, including Executive’s agreement to sign a Separation Agreement and General Release as provided in SECTION 6.10 below in the event of a termination of Executive’s employment with the Company, the Company and Executive hereby agree as follows:

TERMS AND CONDITIONS

SECTION 1
EMPLOYMENT

1.1Employment. The Company hereby employs Executive and Executive hereby accepts such employment by the Company for the period and upon the terms and conditions contained in this Agreement.

1.2Position and Duties. Executive shall serve the Company as its Executive Vice President for eBusiness. Executive shall have all of the powers and duties in such capacity that are customary to the powers and duties of those of an Executive Vice President serving in a similar role in a company within the industry in which the Company operates. The foregoing powers and duties shall be subject to the direction of the Company’s Board of Directors (the “Board”) and its Chief Executive Officer. Executive shall report to the Chief Executive Officer of the Company or his successor. Executive shall devote Executive’s full business time and attention and full diligence and vigor and good faith efforts to the affairs of the Company and Executive shall not engage in any other material business duties or pursuits or render any services of a professional nature to any other entity or person, or serve on any other board of directors (other than a not for profit board of directors), without the prior written consent of the Chief Executive Officer.

1.3Effective Date; Indefinite Term. Executive’s employment under this Agreement shall continue for an indefinite term, until terminated in accordance with SECTION 3 below. Certain provisions, however, as more fully set forth in SECTION 4, SECTION 5 and SECTION 6 below,

continue in effect beyond the date of the termination of Executive’s employment (the “Termination Date”).

SECTION 2COMPENSATION AND BENEFITS

2.1Compensation.

(a)Base Salary. The Company shall pay to Executive an annual base salary at the rate not less than $310,000each calendar year (“Base Salary”), payable in accordance with the Company’s ordinary payroll and withholding practices from time to time in effect for its employees. During the term of employment hereunder, the Executive’s salary shall be reviewed from time to time (but no less than annually) to determine whether an increase in Executive’s salary is appropriate. Any such increase shall be at the sole discretion of the Board.

(b)Annual Cash Bonus. During the term of employment, Executive shall be eligible to receive an annual cash bonus (“Annual Cash Bonus”) under the Company’s incentive award plan for management and executives as from time to time adopted by the Board (the “Incentive Plan”). The Annual Cash Bonus shall be determined based on a target bonus equal to 100% of Base Salary (the “Target Bonus”). The actual amount of the Annual Cash Bonus to be determined by the Board based upon percentage achievement of certain Company-wide and individual performance goals or milestones for each respective calendar year (or any portion thereof), as established in the Incentive Plan, and may be greater or lesser than the Target Bonus.

(c)Annual Equity Grant. During the term of employment, Executive shall be eligible to receive an annual grant of equity (the “Annual Equity Grant”) under the Company’s Incentive Plan. The actual award and amount of any Annual Equity Grant will be determined by the Board or the Compensation Committee of the Board, as appropriate, based upon any of the factors described in the Incentive Plan in addition to general factors relating to retention of talent.

2.2Benefit.

(a)Generally. Executive shall be eligible to participate, to the extent it is legal and permitted by the applicable benefits plans, policies or contracts, in all employee benefits programs that the Company may adopt for its U.S. employees generally providing for sick or other leave, vacation, group health, disability and life insurance benefits. Executive shall be eligible to participate in the Company’s 401(k) plan on the terms and conditions and qualifications of such plan from time to time in effect, with a Company match (if any) no less favorable than that provided to any other Company executive.

(b)Executive. Executive shall be eligible to participate, to the extent it is legal and permitted by the applicable plans, policies or contracts, in all benefits or fringe benefits which are in effect generally for the Company’s executive personnel from time to time.

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2.3Expense Reimbursement. The Company shall pay or reimburse Executive for all reasonable expenses incurred in connection with performing his duties upon presentation of documents in accordance with the reasonable procedures established by the Company.

SECTION 3TERMINATION

3.1By the Company:

(a)For Cause. The Company shall have the right at any time, exercisable upon written notice, to terminate the Executive’s employment for Cause. As used in this Agreement, “Cause” shall mean that the Executive:

(i)has been convicted of, or has entered a pleading of guilty or nolo contendre to, a felony (other than DUI or similar felony) or any crime involving fraud, theft, embezzlement or other act of dishonesty involving the Company;

(ii)has knowingly and intentionally participated in fraud, embezzlement, or other act of dishonesty involving the Company;

(iii)materially fails to attempt in good faith to perform Executive’s duties required under Executive’s employment by or other relationship with the Company (it being agreed that failure of the Company to achieve operating results or similar poor performance of the Company shall not, in and of itself, be deemed a failure to perform Executive’s duties);

(iv)fails to attempt in good faith to comply with a lawful directive of the CEO or the Board that is consistent with the Company’s business practices and Code of Ethics;

(v)engages in willful misconduct for which Executive receives a material and improper personal benefit at the expense of the Company, or accidental misconduct resulting in such a benefit which Executive does not promptly report to the Company and redress promptly upon becoming aware of such benefit;

(vi)in carrying out his duties under this Agreement, has engaged in acts or omissions constituting gross negligence or willful misconduct resulting in, or which, in the good faith opinion of the Board, could be expected to result in, substantial economic harm to the Company;

(vii)has failed for any reason to correct, cease or alter any action or omission that (A) materially violates or does not conform with the Company’s policies, standards or regulations in a material way, (B) constitutes a material breach of this Agreement or the Confidentiality Agreement (as defined below), or (C) constitutes a material breach of his duty of loyalty to the Company; or

(viii)has disclosed any Proprietary Information (as defined below) without authorization from the Board, Chief Executive Officer or General Counsel except as

    3

otherwise permitted by this Agreement, another agreement between the parties or any Company policy in effect at the time of disclosure.

For purposes of the definition of “Cause”, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties.

The Company shall provide written notice to Executive of any act or omission that the Company believes constitutes grounds for “Cause” pursuant to clause (iii), (iv) or (vii) above, and no such act or omission shall constitute “Cause” unless Executive fails to remedy such act or omission within ten (10) days of the receipt of such notice; provided that such ten (10) day cure period shall not apply with respect to any matter that is incapable of cure within such period.

(b)Due to Death or Disability. Executive’s employment shall terminate upon Executive’s death and the Company may terminate Executive’s employment due to Executive’s Disability. As used in this Agreement, “Disability” shall mean any physical or mental disability or incapacity that renders Executive incapable of fully performing the services required of Executive by the Company for a period of 180 consecutive days or for shorter periods aggregating 180 days during any twelve (12) month period. For purposes of the definition of “Disability”, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties. Any question as to the existence of a Disability upon which Executive and the Company cannot agree shall be determined by a qualified independent physician selected by Executive (or, if Executive is unable to make such selection, a selection shall be made by Executive’s spouse, if available, or if such spouse is unavailable due to death or incapacity, any other adult member of Executive’s immediate family), with the consent of the Company, which consent shall not be unreasonably withheld. The determination of such physician made in writing to the Company and Executive shall be final and conclusive for all purposes of determining Disability under this Agreement.

(c)Without Cause. The Company may terminate Executive’s employment under this Agreement at anytime Without Cause. As used in this Agreement, a termination “Without Cause” shall mean the termination of Executive’s employment by the Company other than (i) for Cause pursuant to SECTION 3.1(a) above or (ii) due to death or Disability pursuant to SECTION 3.1(b) above.

3.2By the Executive:

(a)Without Good Reason. Executive may terminate his employment under this Agreement at any time Without Good Reason. As used in this Agreement, a termination “Without Good Reason” shall mean termination of Executive’s employment by Executive other than For Good Reason pursuant to SECTION 3.2(b) below.

(b)For Good Reason. Executive shall have the right at any time to resign his employment under this Agreement For Good Reason. As used in this Agreement, “For Good Reason” shall mean any of the following: (i) a material diminution in the Executive’s Base Salary or Target Annual Cash Bonus, (ii) a material diminution in Executive’s title, authority, duties and responsibilities as compared to Executive’s title, authority, duties and responsibilities measured immediately after the

    4

Effective Date, (iii) any requirement that the Executive report to anyone but (A) the Chief Executive Officer of the ultimate parent entity, or (B) if the Company becomes a subsidiary or a division of another entity not engaged predominantly in the same business as the Company, the most senior executive of such subsidiary or division, (iv) any material breach by the Company or related entities of this Agreement or the Executive’s other agreements with the Company or related entities, (v) the failure of any successor to all or substantially all of the Company’s business or assets to promptly assume and continue this Agreement, whether contractually or as a matter of law, within fifteen (15) days of the transaction which gives rise to the successor’s rights in this Agreement, and (vi) any requirement by the Company that Executive relocate her personal residence.

Notwithstanding the foregoing, no event shall be a Good Reason event unless the Executive gives the Company written notice thereof within ninety (90) days of the first occurrence thereof, the Company does not cure such event within thirty (30) days of the giving of such notice and the Executive does not terminate employment prior to sixty (60) days after the end of the cure period.

3.3Compensation Upon Termination. Upon termination of Executive’s employment with the Company, the Company’s obligation to pay compensation and benefits under SECTION 2 hereof shall terminate, except that the Company shall pay to the Executive or, if applicable, the Executive’s heirs, all earned but unpaid Base Salary under SECTION 2.1(a) and accrued vacation under SECTION 2.2, in each case, through the Termination Date. If the Company terminates Executive’s employment Without Cause, for Executive’s death, for Executive’s Disability, or if Executive terminates his employment for Good Reason, then, in addition, to the foregoing compensation, upon execution and delivery (and non-revocation) by Executive of the Separation Agreement and General Release as set forth in SECTION 6.11, the Company shall pay severance benefits pursuant to SECTION 3.4 below. No other payments or compensation of any kind shall be paid in respect of Executive’s employment with or termination from the Company. In addition, Executive shall be entitled to receive any amounts or benefits due under any plan or program in accordance with the term thereof, and, other than on termination for Cause or a voluntary termination by Executive without Good Reason, his annual bonus for any completed fiscal year at the same time annual bonuses would have been paid if he had continued in employment (it being understood that in the event of any such termination Executive is not entitled to an Annual Bonus for the then-current Fiscal Year). Notwithstanding any contrary provision contained herein, in the event of any termination of Executive’s employment, the exclusive remedies available to the Executive shall be the amounts due under this SECTION 3, which are in the nature of liquidated damages, and are not in the nature of a penalty.

3.4Severance Benefits.

(a)Termination without Cause or for Good Reason. Subject to the terms and conditions of eligibility for Executive’s receipt of severance benefits under this Agreement, including the timely execution and delivery (and non-revocation) by Executive of the Separation Agreement and General Release as set forth in SECTION 6.11, the Company shall pay to Executive, as severance benefits:

(i)An amount equal to the product of (a) the applicable Severance Multiple (as defined below)and (b) the sum of (x) the highest annual Base Salary rate for Executive in effect over the prior two (2) years and (y) the highest amount of Executive’s Target Bonus

    5

or Annual Cash Bonus actually paid over the prior two (2) years, whichever is greater, which total payment shall be paid to Executive on a salary continuation basis according to the Company’s normal payroll practices over the 18month period following the date the Executive incurs a Separation from Service, but in no event less frequently than monthly. As used herein, the “Severance Multiple” shall be 2.5 if the termination without Cause or resignation for Good Reason occurs within ninety (90) days preceding or twelve (12) months following a “Change in Control” (as defined below) and 1.5 in the case of any other termination without Cause or resignation for Good Reason.

(ii)Subject to (1) the Executive’s timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), and (2) the Executive’s continued copayment of premiums at the same level and cost to the Executive as if the Executive were an employee of the Company (excluding, for purposes of calculating cost, an employee’s ability to pay premiums with pre-tax dollars), continued participation in the Company’s group health plan (to the extent permitted under applicable law and the terms of such plan) which covers the Executive (and the Executive’s eligible dependents) for a period of 18 months at the Company’s expense, provided that the Executive is eligible and remains eligible for COBRA coverage. The Company may modify its obligation under this SECTION 3.4(a)(ii) to the extent reasonably necessary to avoid any penalty or excise taxes imposed on it in connection with the continued payment of premiums by the Company under the Patient Protection and Affordable Care Act of 2010, as amended.

(iii)In addition to the benefits described in Section 3.4(a)(i) and (ii), in the event that such termination occurs within ninety (90) days preceding or twelve (12) months following a “Change in Control” (as defined below), the Company shall accelerate the vesting of the Executive’s then-outstanding and unvested stock options, stock appreciation rights, restricted stock units or shares, performance stock units or any other Company equity compensation awards, to the extent that such awards would have vested solely upon the Executive’s continued employment, such that one hundred percent (100%) of such awards become vested in full.

(b)Termination for Executive’s Death or Disability. In the event of Executive’s death or Disability, the Company shall accelerate the vesting of the Executive’s then-outstanding and unvested stock options, stock appreciation rights, restricted stock units or shares, performance stock units or any other Company equity compensation awards, to the extent that such awards would have vested solely upon the Executive’s continued employment, such that one hundred percent (100%) of such awards become vested in full.

(c)Notwithstanding any other provision of this Agreement, any severance benefits that would otherwise have been paid before the Company’s first normal payroll payment date falling on or after the thirtieth (30th) day after the date on which the Executive incurs a Separation from Service (the “First Payment Date”) shall be made on the First Payment Date. Each separate severance installment payment and each other payment that Executive may be eligible to receive under this Agreement shall be a separate payment under this Agreement for all purposes.

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(d)Notwithstanding anything to the contrary in this Agreement, with respect to any severance benefits or amounts payable to the Executive under this Agreement, in no event shall a termination of employment occur under this Agreement unless such termination constitutes a Separation from Service. For purposes of this Agreement, a “Separation from Service” shall mean the Executive’s “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto.

(e)Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, amounts payable to the Executive pursuant to this SECTION 3.4 shall be made in reliance upon Treas. Reg. Section 1.409A-1(b)(9) (Separation Pay Plans) or Treas. Reg. Section 1.409A-1(b)(4) (Short-Term Deferrals). However, to the extent any such payments are treated as non-qualified deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then if Executive is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which the Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of the Executive’s Separation from Service or (ii) the date of Executive’s death. Upon the earlier of such dates, all payments deferred pursuant to this SECTION 3.4(e) shall be paid in a lump sum to the Executive. Thereafter, payments will resume in accordance with this Agreement. The determination of whether the Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be made by the Company in accordance with the terms of Section 409A of the Code and applicable guidance thereunder (including without limitation Treas. Reg. Section 1.409A-1(i) and any successor provision thereto).

(f)The Executive shall have no duty or obligation to mitigate the amounts due under SECTION 3.4(a) above and any amounts earned by Executive from other employment shall not be offset or reduce the amounts due hereunder.

(g)The term “Change in Control” shall mean the occurrence of any of the following events: (i) the Board approves a plan of liquidation, dissolution or winding-up of the Company, (ii) the consummation of a sale or other disposition of all or substantially all of the assets of the Company and its subsidiaries, (iii) any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (other than the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, Gores Building Holdings, LLC. or its affiliates, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Common Stock of the Company), becoming the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities or otherwise acquiring the power to elect or designate a majority of the members of the Board, (iv) a merger or consolidation of the Company with any other corporation or entity (a “Merger Partner”), as a result of which (A) the voting securities of the Merger Partner outstanding immediately prior thereto represent (either by remaining outstanding or by being converted into voting securities of a surviving entity) more than

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50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (B) the shareholders of the Merger Partner immediately prior thereto have the power to elect or designate a majority of the members of the Board of the Company or such surviving entity; provided, however, that a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person (other than those covered by the exceptions in clause (iii) above) acquires more than 50% of the combined voting power of the Company’s then outstanding securities or the power to elect or designate a majority of the members of the Board shall not constitute a Change in Control of the Company. For the avoidance of doubt Gores Building Holdings, LLC or any of its affiliates reducing its equity holdings in the Company, directly or indirectly, shall not, in and of itself, constitute a Change in Control hereunder, unless such reduction in equity holdings is part of a transaction that constitutes a Change in Control pursuant to clauses (iii) or (iv) of this definition.

SECTION 4CERTAIN AGREEMENTS

4.1Confidentiality. Executive acknowledges that the Company owns and shall own and has developed and shall develop proprietary information concerning its business and its customers and clients (“Proprietary Information”). Such Proprietary Information includes, among other things, trade secrets, financial information, product plans, customer lists, marketing plans, systems, manuals, training materials, forecasts, inventions, improvements, know-how and other intellectual property, in each case, relating to the Company’s business. Executive shall, at all times, both during employment by the Company and thereafter, keep all Proprietary Information in confidence and trust and shall not use or disclose any Proprietary Information without the written consent of the Company, except as necessary in the ordinary course of Executive’s duties. Executive shall keep the terms of this Agreement in confidence and trust and shall not disclose such terms, except to Executive’s family, accountants, financial advisors, or attorneys, or as otherwise authorized or required by law. Executive agrees to execute the Company’s standard form of confidentiality agreement (the “Confidentiality Agreement”) applicable to all employees on the Effective Date.

4.2Company Property. Executive recognizes that all Proprietary Information, however stored or memorialized, and all identification cards, keys, flash drives, computers, mobile phones, Personal Data Assistants, telephone numbers, access codes, marketing materials, documents, records and other equipment or property which the Company provides are the sole property of the Company. Upon termination of employment, Executive shall (1) refrain from taking any such property from the Company’s premises, and (2) return any such property in Executive’s possession within ten (10) business days.

4.3Assignment of Inventions to the Company. Executive shall promptly disclose to the Company all improvements, inventions, formulas, processes, computer programs, know-how and trade secrets developed, whether or not patentable, made or conceived or reduced to practice or developed by Executive, either alone or jointly with others, during and related to Executive’s employment and the Company’s business or while using the Company’s equipment, supplies, facilities or trade secret information (collectively, “Inventions”). All Inventions, and other intellectual property rights shall be the sole property of the Company and shall be “works made for

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hire.” Executive hereby assigns to the Company any rights Executive may have or acquire in all Inventions and agrees to perform, during and after employment with the Company, at the Company’s expense including reasonable compensation to Executive, all acts reasonably necessary by the Company in obtaining and enforcing intellectual property rights with respect to such Inventions. Executive hereby irrevocably appoints the Company and its officers and agents as Executive’s attorney-in-fact to act for and in Executive’s name and stead with respect to such Inventions.

SECTION 5COVENANT NOT TO ENGAGE IN CERTAIN ACTS

5.1General. The parties understand and agree that the purpose of the restrictions contained in this Section 5 is to protect the goodwill and other legitimate business interests of the Company, and that the Company would not have entered into this Agreement in the absence of such restrictions. Executive acknowledges and agrees that the restrictions are reasonable and do not, and will not, unduly impair his ability to make a living after the termination of his or her employment with the Company. The provisions of this SECTION 5 shall survive the expiration or sooner termination of this Agreement. For purposes of this SECTION 5, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties.

5.2Non-Compete; Non-Diversion. In consideration for this Agreement to employ Executive and other valuable consideration provided hereunder, Executive agrees and covenants that during the term of employment and for a period of twelve (12) months after the Termination Date, Executive shall not, directly or indirectly, for himself or any third party, or alone or as a member of a partnership or limited liability company, or as an officer, director, shareholder, member or otherwise, engage in the following acts:

(i)divert or attempt to divert any existing business of the Company provided that after the Termination Date this shall not prevent normal competitive sales for a non-Listed Company (as defined below);

(ii)solicit, induce or entice, or seek to solicit, induce or entice, or otherwise interfere with the Company’s business relationship with, any customer of the Company, provided that after the Termination Date this shall not prevent normal competitive sales activities for a non-Listed Company;

(iii)(A) during the term of employment, render any services (whether as an independent contractor or otherwise) on behalf of any company or line of business that competes anywhere in the United States with the Company (a “Competing Business”), and (B) for a period of twelve months after the Termination Date, render any services other than legal services (whether as an independent contractor or otherwise) on behalf of any Listed Company (as defined below);

(iv)own or control any interest in (except as a passive investor of less than two percent (2%) of the capital stock or publicly traded notes or debentures of a publicly held company), or become an officer, director, partner, member, or joint venturer of, any

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Competing Business, provided that after the Termination Date this shall only apply to the Listed Companies;

(v)advance credit or lend money to any third party for the purpose of establishing or operating any Competing Business, provided that after the Termination Date this shall only apply to the Listed Companies; or

(vi)with respect to any substantially full time independent contractor of the Company, employee of the Company or individual who was, at any time during the three months prior to the Termination Date, an employee of the Company: (A) hire or retain, or attempt to hire or retain, such individual to provide services for any third party; or (B) encourage, induce, solicit or attempt to solicit, divert, cause or attempt to cause, such individual to (1) terminate and/or leave his or her employment, (2) accept employment with any person or entity other than the Company, or (3) terminate his or her relationship with the Company or devote less than his or her full time efforts to the Company.

As used herein, “Listed Company” means one of nine (9) companies that are material competitors as identified by the Company, provided that the Company may at any time change such nine (9) companies to alternative competitors so long as the number does not exceed nine (9), no change can be effective after the termination of Executive’s employment with the Company and any change shall be effective thirty (30) days after Executive is given written notice thereof and only if at the end of such thirty (30) day period the Executive is employed by the Company. As of the Effective Date, the Listed Companies are Pro Build Holdings, Inc., 84 Lumber Co., Builders FirstSource, Inc., BMC Select, HD Supply, Inc., Ganahl Lumber Co., US LBM Holdings, LLC, Carter Lumber Company and McCoy Corporation (dba McCoy’s Building Supply). The parties acknowledge and agree that clause (vi) above shall not be violated by general advertising not targeted at the foregoing people nor serving as a reference upon request of the foregoing with regard to an entity with which Executive is not associated. The parties acknowledge and agree that the term “Competing Business” does not include (i) builders of light frame (wood) commercial and new residential homes or (ii) any manufacturer of lumber, building materials or equipment or appliances. Further, the Parties hereby acknowledge and agree that if Executive becomes employed by any company described in the preceding sentence, Executive shall be permitted to contact, solicit, sell to or otherwise do business with such Competing Businesses and that such activities shall not violate the terms of this Section.

5.3Cessation/Reimbursement of Payments. If Executive violates any provision of this SECTION 5, the Company may, upon giving written notice to Executive, immediately cease all payments and benefits that it may be providing to Executive pursuant to SECTION 2 or SECTION 3, and Executive shall be required to reimburse the Company for any payments received from, and the cash value of any benefits provided by, the Company between the first day of the violation and the date such notice is given; provided, however, that the foregoing shall be in addition to such other remedies as may be available to the Company and shall not be deemed to permit Executive to forego or waive such payments in order to avoid his or her obligations under this SECTION 5; and provided, further, that any release of claims by Executive pursuant to SECTION 6.11 shall continue in effect.

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5.4Survival; Injunctive Relief. Executive agrees that the provisions of this SECTION 5 shall survive the termination of this Agreement and the termination of the Executive’s employment. Executive acknowledges that a breach by him of the covenants contained in this SECTION 5 cannot be reasonably or adequately compensated in damages in an action at law and that such breach will cause the Company immeasurable and irreparable injury and damage. Executive further acknowledges that he possesses unique skills, knowledge and ability and that competition in violation of this SECTION 5 would be extremely detrimental to the Company. By reason thereof, each of the Company and Executive agrees that the other shall be entitled, in addition to any other remedies it may have under this Agreement, at law or in equity, or otherwise, to temporary, preliminary and/or permanent injunctive and other equitable relief to prevent or curtail any actual or threatened violation of this SECTION 5, without proof of actual damages that have been or may be caused to the Company by such breach or threatened breach, and waives to the fullest extent permitted by law the posting or securing of any bond by the other party in connection with such remedies.

SECTION 6MISCELLANEOUS

6.1Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by certified or registered mail, postage prepaid, with return receipt requested, telecopy (with hard copy delivered by overnight courier service), or delivered by hand, messenger or overnight courier service, and shall be deemed given when received at the addresses of the parties set forth below, or at such other address furnished in writing to the other parties hereto:

To the Company: Stock Building Supply Holdings, Inc.8020 Arco Corporate Drive, Ste. 400Raleigh, NC 27617Attn: General CounselFax:919-431-1180

To Executive: at the home address of Executive maintained in the human resource records of the Company.

6.2Severability. The parties agree that it is not their intention to violate any public policy or statutory or common law. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law. Without limiting the foregoing, if any portion of Section 5 is held to be unenforceable, the maximum enforceable restriction of time, scope of activities and geographic area will be substituted for any such restrictions held unenforceable.

6.3Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of North Carolina without regard to its principles of conflicts of laws. Executive agrees to submit to the jurisdiction of the State of North Carolina; agrees that any dispute concerning the interpretation or application of this Agreement shall be heard by A

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JUDGE AND NOT A JURY; and agrees that any dispute shall be brought exclusively in a state or federal court of competent jurisdiction in North Carolina. Executive waives any and all objections to jurisdiction or venue.

6.4Survival. The covenants and agreements of the parties set forth in Sections 4, 5 and 6 are of a continuing nature and shall survive the expiration, termination or cancellation of this Agreement, irrespective of the reason therefor.

6.5Entire Agreement. This Agreement contains the entire understanding between the parties hereto with respect to the terms of employment, compensation, benefits, and covenants of Executive, and supersede all other prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, between Executive and the Company relating to the subject matter of the Agreement, which such other prior and contemporaneous agreements and understandings, inducements or conditions shall be deemed terminated effective immediately. For the avoidance of doubt, the parties agree that any and all indemnification agreements between Executive and the Company shall continue in full force unimpaired by this Agreement. Notwithstanding the foregoing, Executive acknowledges that the Confidentiality Agreement shall continue in effect during the term of Executive’s employment.

6.6Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the Company’s successors and assigns, including any direct or indirect successor by purchase, merger, consolidation, reorganization, liquidation, dissolution, winding up or otherwise with respect to all or substantially all of the business or assets of the Company, and the Executive’s spouse, heirs, and personal and legal representatives.

6.7Counterparts; Amendment. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be amended or modified only by written instrument duly executed by the Company and Executive.

6.8Voluntary Agreement. Executive has read this Agreement carefully and understands and accepts the obligations that it imposes upon Executive without reservation. No other promises or representations have been made to Executive to induce Executive to sign this Agreement. Executive is signing this Agreement voluntarily and freely.

6.9Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns (including any direct or indirect successor, spouses, heirs and personal and legal representatives. Any such successor or assign of the Company shall be included in the term “Company” as used in this Agreement.

6.10Release of Claims. In consideration for the compensation and other benefits provided pursuant to this Agreement, Executive agrees to execute a “Separation Agreement and General Release” form substantially in the form of Exhibit A attached hereto and incorporated herein by this reference. The Company’s obligation to pay severance benefits pursuant to SECTION 3.4 is expressly conditioned on Executive’s execution and delivery of such Separation Agreement and General Release no later than forty-five (45) days after the date the Executive incurs a Separation

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from Service without revoking it for a period of seven (7) days following delivery. Executive’s failure to execute and deliver such Separation Agreement and General Release within such forty-five (45) day time period (or Executive’s subsequent revocation of such Separation Agreement and General Release) will void the Company’s obligation to pay severance benefits under this Agreement.

6.11Confidentiality Of Previous Employers’ Information. The Company acknowledges that the Executive may have had access to confidential and proprietary information of his previous employer(s) and that Executive may be obligated to maintain the confidentiality of such information, not use such information or not to provide certain services to the Company, in each case pursuant to applicable law and/or any contractual relationship between Executive and a previous employer. The Company hereby instructs Executive as follows: (1) Executive shall not disclose any such confidential or proprietary information to the Company or any of its affiliates, (2) Executive shall not use any such confidential or proprietary information in connection with his employment with the Company, and (3) Executive shall not perform any services for the benefit of the Company that would cause Executive to be in breach of his obligations owed to any previous employer or other third party. If the Company requests Executive to provide any such services or to disclose any such information, Executive will advise the Company that he or she is prohibited from doing so. Executive agrees to indemnify, defend and hold the Company and its affiliates harmless from and against any claims, losses or liabilities (including reasonable attorneys’ fees) incurred by the Company or any of its affiliates as a result of any breach by Executive of this SECTION 6.11.

6.12In-kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement, in-kind benefits and reimbursements provided under this Agreement during any tax year of the Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of the Executive, except for the reimbursement of medical expenses referred to in Section 105(b) of the Code, and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to the Executive as soon as administratively practicable following such submission, but in no event later than December 31st of the calendar year following the calendar year in which the expense was incurred. In no event shall the Executive be entitled to any reimbursement payments after December 31st of the calendar year following the calendar year in which the expense was incurred. This SECTION 6.12 shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to the Executive.

6.13Section 409A. This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under this Agreement become subject to (a) the gross income inclusion set forth within Code Section 409A(a)(1)(A) or (b) the interest and additional tax set forth within Code Section 409A(a)(1)(B) (together, referred to herein as the “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. In no event shall the Company be required to provide a tax gross-up payment to Executive or otherwise reimburse Executive with respect to Section 409A Penalties. In the event that following the date hereof the

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Company reasonably determines that any compensation or benefits payable under this Agreement may be subject to Section 409A of the Code, the Company and the Executive shall work together to adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to (x) exempt the compensation and benefits payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (y) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.

6.14Indemnification, etc. The Company shall indemnify and hold harmless Executive to the fullest extent permitted by law (including advance of legal fees) for any action or inaction he takes in good faith with regard to the Company or parent or any benefit plan of either. Further, the Company shall cover Executive on its directors’ and officers’ liability insurance policies to no less extent than that which covers any other officer or director of the Company.

[signatures on following page]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

COMPANY:		EXECUTIVE:
STOCK BUILDING SUPPLYHOLDINGS, INC.
By:	/s/ C. Lowell Ball	/s/ Lisa M. Hamblet
Name:	C. Lowell Ball	LISA M. HAMBLET
Its:	Senior Vice President, General Counsel and Corporate Secretary

Signature Page to Employment Agreement

EXHIBIT ASEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (this “Agreement”) is made as of ________________________ by and between LISA M. HAMBLET (“Executive”) and STOCK BUILDING SUPPLY HOLDINGS, INC. (the “Company”). For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.Termination of Employment. The parties agree that Executive’s employment with the Company and all of its affiliates is terminated effective as of _____________ (the “Effective Date”).

2.Payments Due to Executive. Executive acknowledges receipt of $______________ from the Company, representing Executive’s accrued but unpaid Base Salary through the Effective Date. Other than as expressly set forth in this Section, Executive is not entitled to any consulting fees, wages, accrued vacation pay, benefits or any other amounts with respect to his employment through the Effective Date.

3.Severance Benefits and Continuing Health Insurance Coverage. In consideration of Executive’s execution and non-revocation of this Agreement, the Company agrees to pay to Executive the amounts provided in SECTION 3.4 of that certain Employment Agreement, dated as of ____________ by and between the Executive and the Company.

4.General Release.

(a)Executive, on behalf of Executive, his or her heirs, executors, personal representatives, administrators and assigns, irrevocably, knowingly and unconditionally releases, remises and discharges the Company, its parents, all current or former affiliated or related companies of the Company and its parent, partnerships, or joint ventures, and, with respect to each of them, all of the Company’s or such related entities’ predecessors and successors, and with respect to each such entity, its officers, directors, managers, Executives, equity holders, advisors and counsel (collectively, the “Company Parties”) from any and all actions, causes of action, charges, complaints, claims, damages, demands, debts, lawsuits, rights, understandings and obligations of any kind, nature or description whatsoever, known or unknown (collectively, the “Claims”), arising out of or relating to the Executive’s employment with the Company and/or the separation of Executive from the Company.

(b)This general release of Claims by Executive includes, without limitation, (i) all Claims based upon actions or omissions (or alleged actions or omissions) that have occurred up to and including the date of this Agreement, regardless of ripeness or other limitation on immediate pursuit of any Claim in the absence of this Agreement; (ii) all Claims relating to or arising out of Executive’s employment with and separation from the Company; (iii) all Claims (including Claims for discrimination, harassment, and retaliation) arising under any federal, state or local statute, regulation, ordinance, or the common law, including without limitation, Claims arising under Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Age Discrimination

in Employment Act, as amended, the Family and Medical Leave Act and the Executive Retirement Income Security Act of 1974, the Civil Rights Act of 1991, the Equal Pay Act, the Fair labor Standards Act, 42 U.S.C. § 1981, and any other federal or state law, local ordinance or common law including for wrongful discharge, breach of implied or express contract, intentional or negligent infliction of emotional distress, defamation or other tort; and (iv) all Claims for reinstatement, attorney’s fees, interest, costs, wages or other compensation.

(c)Executive agrees that there is a risk that each and every injury which he or she may have suffered by reason of his or her employment relationship might not now be known, and there is a further risk that such injuries, whether known or unknown at the date of this Agreement, might become progressively worse, and that as a result thereof further damages may be sustained by Executive; nevertheless, Executive desires to forever and fully release and discharge the Company Parties, and he or she fully understands that by the execution of this Agreement no further claims for any such injuries may ever be asserted.    

(d)This general release does not release any Claim that relates to: (i) Executive’s right to enforce this Agreement; (ii) any rights Executive may have to indemnification from personal liability or to protection under any insurance policy maintained by the Company, including without limitation any general liability, EPLI, or directors and officers insurance policy or any contractual indemnification agreement; (iii) Executive’s right, if any, to government-provided unemployment and worker’s compensation benefits; or (iv) Executive’s rights under any Company Executive benefit plans (i.e. health, disability or retirement plans), which by their explicit terms survive the termination of Executive’s employment.

(e)Executive agrees that the consideration set forth in Paragraph 3 above shall constitute the entire consideration provided under this Agreement, and that Executive will not seek from the Company Parties any further compensation or other consideration for any claimed obligation, entitlement, damage, cost or attorneys’ fees in connection with the matters encompassed by this Agreement.

(f)Executive understands and agrees that if any facts with respect to this Agreement or Executive’s prior treatment by or employment with the Company are found to be different from the facts now believed to be true, Executive expressly accepts, assumes the risk of, and agrees that this Agreement shall remain effective notwithstanding such differences. Executive agrees that the various items of consideration set forth in this Agreement fully compensate for said risks, and that Executive will have no legal recourse against the Company in the event of discovery of a difference in facts.

(g)Executive agrees to the release of all known and unknown claims, including expressly the waiver of any rights or claims arising out of the Federal Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”), and in connection with such waiver of ADEA claims, and as provided by the Older Worker Benefit Protection Act, Executive understands and agrees as follows:

i Executive has the right to consult with an attorney before signing this Agreement, and is hereby advised to do so;

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ii Executive shall have a period of forty-five (45) days from the Termination Date (or from the date of receipt of this Agreement if received after the Termination Date) in which to consider the terms of the Agreement (the “Review Period”). Executive may at his or her option execute this Agreement at any time during the Review Period. If the Executive does not return the signed Agreement to the Company prior to the expiration of the 45 day period, then the offer of severance benefits set forth in this Agreement shall lapse and shall be withdrawn by the Company;

iii Executive may revoke this Agreement at any time during the first seven (7) days following Executive’s execution of this Agreement, and this Agreement and release shall not be effective or enforceable until the seven-day period has expired (“Revocation Period Expiration Date”). Notice of a revocation by the Executive must be made to the designated representative of the Company (as described below) within the seven (7) day period after Executive signs this Agreement. If Executive revokes this Agreement, it shall not be effective or enforceable. Accordingly, the “Effective Date” of this Agreement shall be on the eighth (8th) day after Executive signs the Agreement and returns it to the Company, and provided that Executive does not revoke the Agreement during the seven (7) day revocation period;

In the event Executive elects to revoke this release pursuant to Paragraph 4(g)iii above, Executive shall notify Company by hand-delivery, express courier or certified mail, return receipt requested, within seven (7) days after signing this Agreement to: ATTN: General Counsel, Legal Department, Stock Building Supply Holdings, Inc., 8020 Arco Corporate Drive, Suite 400, Raleigh, North Carolina 27617. In the event that Executive exercises his or her right to revoke this release pursuant to Paragraph 4(g)iii above, any and all obligations of Company under this Agreement shall be null and void. Executive agrees that by signing this Agreement prior to the expiration of the forty-five (45) day period he or she has voluntarily waived his or her right to consider this Agreement for the full forty-five (45) day period.

EXECUTIVE AGREES THAT THE CONSIDERATION RECEIVED BY HIM OR HER UNDER THIS AGREEMENT, INCLUDING THE PAYMENTS DESCRIBED ABOVE, IS IN FULL AND COMPLETE SATISFACTION OF ANY CLAIMS THAT EXECUTIVE MAY HAVE, OR MAY HAVE HAD, ARISING OUT OF EXECUTIVE’S EMPLOYMENT WITH COMPANY (INCLUDING FOR THE AVOIDANCE OF DOUBT, ALL OF ITS SUBSIDIARIES OR AFFILIATES) OR THE TERMINATION OF THAT EMPLOYMENT, UP TO THE DATE OF EXECUTION OF THIS AGREEMENT. EXECUTIVE ACKNOWLEDGES THAT HE OR SHE UNDERSTANDS THAT, BY ENTERING INTO THIS AGREEMENT, HE OR SHE NO LONGER HAS THE RIGHT TO ASSERT ANY CLAIM OR LAWSUIT OF ANY KIND ATTEMPTING TO RECOVER MONEY OR ANY OTHER REILEF AGAINST THE COMPANY PARTIES FOR ACTS OR INJURIES ARISING OUT OF EXECUTIVE’S FORMER EMPLOYMENT BY COMPANY (INCLUDING FOR THE AVOIDANCE OF DOUBT, ALL OF ITS SUBSIDIARIES OR AFFILIATES) OR THE TERMINATION OF THAT EMPLOYMENT. Such claims further include any claims Executive may have pursuant to an internal grievance procedure at Company (including for the avoidance of doubt, all of its subsidiaries or affiliates). Executive does not waive any rights or claims that may arise after the date this Agreement is executed.

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5.Review of Agreement; No Assignment of Claims. Executive represents and warrants that he or she (a) has carefully read and understands all of the provisions of this Agreement and has had the opportunity for it to be reviewed and explained by counsel to the extent Executive deems it necessary, (b) is voluntarily entering into this Agreement, (c) has not relied upon any representation or statement made by the Company or any other person with regard to the subject matter or effect of this Agreement, (d) has not transferred or assigned any Claims and (e) has not filed any complaint or charge against any of the Company Parties with any local, state, or federal agency or court.

6.No Claims. Each party represents that it has not filed any Claim against the other Party with any state, federal or local agency or court and that it will not file any Claim at any time regarding the matters covered by this Agreement; provided, however, that nothing in this Agreement shall be construed to prohibit Executive from filing a Claim, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission; provided, further, that Executive acknowledges that he will not be entitled to recover any monetary or other damages in connection with or as a result of any such EEOC or state FEP agency proceeding.

7.Interpretation. This Agreement shall take effect as an instrument under seal and shall be governed and construed in accordance with the laws of the State of North Carolina without regard to provisions or principles thereof relating to conflict of laws.

8.Agreement as Defense. This Agreement may be pleaded as a full and complete defense to any subsequent action or other proceeding arising out of, relating to, or having anything to do with any and all Claims, counterclaims, defenses or other matters capable of being alleged, which are specifically released and discharged by this Agreement. This Agreement may also be used to abate any such action or proceeding and/or as a basis of a cross-complaint for damages.

9.Nondisclosure of Agreement. The terms and conditions of this Agreement are confidential. Executive agrees not to disclose the terms of this Agreement to anyone except immediate family members and Executive’s attorneys and financial advisers. Executive further agrees to inform these people that the Agreement is confidential and must not be disclosed to anyone else. Executive may disclose the terms of this Agreement if compelled to do so by a court, but Executive agrees to notify the Company immediately if anyone seeks to compel Executive’s testimony in this regard, and to cooperate with the Company if the Company decides to oppose such effort. Executive agrees that disclosure by Executive in violation of this Agreement would cause so much injury to the Company that money alone could not fully compensate the Company and that the Company is entitled to injunctive and equitable relief. Executive also agrees that the Company would be entitled to recover money from Executive if this Agreement were violated.

10.Ongoing Covenants. Executive acknowledges that nothing in this Agreement shall limit or otherwise impact Executive’s continuing obligations of confidentiality to the Company in accordance with Company policy and applicable law, or any applicable Company policies or agreements between the Company and Executive with respect to non-competition or non-solicitation, and Executive covenants and agrees to abide by all such continuing obligations.

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11.No Adverse Comments. For two (2) years, Executive and the Company agree not to make, issue, release or authorize any written or oral statements, derogatory or defamatory in nature, about the other (which in the case of the Company shall include its affiliates or their respective products, services, directors, officers or Executives), provided that the foregoing shall not be violated by truthful testimony in response to legal process, normal competitive statements, rebuttal of statements by the other or actions to enforce the party’s rights.

12.Integration; Severability. The terms and conditions of this Agreement constitute the entire agreement between Company and Executive and supercede all previous communications, either oral or written, between the parties with respect to the subject matter of this Agreement. No agreement or understanding varying or extending the terms of this Agreement shall be binding upon either party unless in writing signed by or on behalf of such party. In the event that a court finds any portion of this Agreement unenforceable for any reason whatsoever, Company and Executive agree that the other provisions of the Agreement shall be deemed to be severable and will continue in full force and effect to the fullest extent permitted by law.

EXECUTIVE ACKNOWLEDGES THE FOLLOWING: HE OR SHE HAS ENTERED INTO THIS AGREEMENT KNOWINGLY, VOLUNTARILY AND OF HIS OR HER OWN FREE WILL WITH A FULL UNDERSTANDING OF ITS TERMS; HE OR SHE HAS READ THIS AGREEMENT; THAT HE OR SHE FULLY UNDERSTANDS ITS TERMS; THAT EXECUTIVE IS ADVISED TO CONSULT AN ATTORNEY FOR ADVICE; THAT HE OR SHE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT; THAT HE OR SHE HAS HAD AMPLE TIME TO CONSIDER HIS OR HER DECISION BEFORE ENTERING INTO THE AGREEMENT. EXECUTIVE ACKNOWLEDGES THAT HE OR SHE IS SATISFIED WITH THE TERMS OF THIS AGREEMENT AND AGREES THAT THE TERMS ARE BINDING UPON HIM OR HER.

IN WITNESS WHEREOF, the parties have executed this Agreement with effect as of the date first above written.

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EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY THE COMPANY OF HIS ABILITY TO TAKE ADVANTAGE OF THE CONSIDERATION PERIOD AFFORDED BY PARAGRAPH 4 ABOVE AND THAT HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.

IN WITNESS WHEREOF, the parties have executed this Agreement with effect as of the date first above written.

LISA M. HAMBLET

STOCK BUILDING SUPPLY HOLDINGS, INC.

By:

Name:

Title:

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EX-10.5

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of October 9, 2014 (the “Effective Date”) between C. LOWELL BALL (“Executive”) and STOCK BUILDING SUPPLY HOLDINGS, INC., a Delaware corporation (the “Company”).

RECITALS

WHEREAS, Executive is currently employed by the Company as its Senior Vice President, General Counsel and Corporate Secretary; and

WHEREAS, Executive and the Company desire to enter into this Agreement to set forth the terms and conditions of Executive’s ongoing employment with the Company.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, including Executive’s agreement to sign a Separation Agreement and General Release as provided in SECTION 6.10 below in the event of a termination of Executive’s employment with the Company, the Company and Executive hereby agree as follows:

TERMS AND CONDITIONS

SECTION 1
EMPLOYMENT

1.1Employment. The Company hereby employs Executive and Executive hereby accepts such employment by the Company for the period and upon the terms and conditions contained in this Agreement.

1.2Position and Duties. Executive shall serve the Company as its Senior Vice President, General Counsel and Corporate Secretary. Executive shall have all of the powers and duties in such capacity that are customary to the powers and duties of those of a Senior Vice President, General Counsel and Corporate Secretary of a company within the industry in which the Company operates, including specifically the following: overall management responsibility for the Company and its subsidiaries for (i) the legal and regulatory affairs including without limitation corporate and commercial transactions, resolution of disputed (including litigated and non-litigated matters and management of regulatory compliance, (ii) corporate governance, and (iii) the placement of insurance for the Company and management of insurer and brokerage relationships. The foregoing powers and duties shall be subject to the direction of the Company’s Board of Directors (the “Board”) and its Chief Executive Officer. Executive shall report to the Chief Executive Officer of the Company or his successor. Executive shall devote Executive’s full business time and attention and full diligence and vigor and good faith efforts to the affairs of the Company and Executive shall not engage in any other material business duties or pursuits or render any services of a professional nature to any other entity or person (other than rendering incidental legal advice, arbitration or mediation services to third parties unrelated to the Company’s business or operations, provided that the foregoing does not (a) create a fiduciary or business conflict with the interests of the Company

or (b) materially interfere with Executive’s performance of his duties hereunder), or serve on any other board of directors (other than a not for profit board of directors), without the prior written consent of the Chief Executive Officer. Executive will be based at the Company’s headquarters in Raleigh, North Carolina or at such other location as agreed by Executive and the Company’s Chief Executive Officer.

1.3Effective Date; Indefinite Term. Executive’s employment under this Agreement shall continue for an indefinite term, until terminated in accordance with SECTION 3 below. Certain provisions, however, as more fully set forth in SECTION 4, SECTION 5 and SECTION 6 below, continue in effect beyond the date of the termination of Executive’s employment (the “Termination Date”).

SECTION 2COMPENSATION AND BENEFITS

2.1Compensation.

(a)Base Salary. The Company shall pay to Executive an annual base salary at the rate not less than $200,000each calendar year (“Base Salary”), payable in accordance with the Company’s ordinary payroll and withholding practices from time to time in effect for its employees. During the term of employment hereunder, the Executive’s salary shall be reviewed from time to time (but no less than annually) to determine whether an increase in Executive’s salary is appropriate. Any such increase shall be at the sole discretion of the Board.

(b)Annual Cash Bonus. During the term of employment, Executive shall be eligible to receive an annual cash bonus (“Annual Cash Bonus”) under the Company’s incentive award plan for management and executives as from time to time adopted by the Board (the “Incentive Plan”). The Annual Cash Bonus shall be determined based on a target bonus equal to 75% of Base Salary (the “Target Bonus”). The actual amount of the Annual Cash Bonus to be determined by the Board based upon percentage achievement of certain Company-wide and individual performance goals or milestones for each respective calendar year (or any portion thereof), as established in the Incentive Plan, and may be greater or lesser than the Target Bonus.

(c)Annual Equity Grant. During the term of employment, Executive shall be eligible to receive an annual grant of equity (the “Annual Equity Grant”) under the Company’s Incentive Plan. The actual award and amount of any Annual Equity Grant will be determined by the Board or the Compensation Committee of the Board, as appropriate, based upon any of the factors described in the Incentive Plan in addition to general factors relating to retention of talent.

2.2Benefit.

(a)Generally. Executive shall be eligible to participate, to the extent it is legal and permitted by the applicable benefits plans, policies or contracts, in all employee benefits programs that the Company may adopt for its U.S. employees generally providing for sick or other leave, vacation, group health, disability and life insurance benefits. Executive shall be eligible to participate in the Company’s 401(k) plan on the terms and conditions and qualifications of such plan from time

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to time in effect, with a Company match (if any) no less favorable than that provided to any other Company executive.

(b)Executive. Executive shall be eligible to participate, to the extent it is legal and permitted by the applicable plans, policies or contracts, in all benefits or fringe benefits which are in effect generally for the Company’s executive personnel from time to time.

2.3Expense Reimbursement. The Company shall pay or reimburse Executive for all reasonable expenses incurred in connection with performing his duties upon presentation of documents in accordance with the reasonable procedures established by the Company.

SECTION 3TERMINATION

3.1By the Company:

(a)For Cause. The Company shall have the right at any time, exercisable upon written notice, to terminate the Executive’s employment for Cause. As used in this Agreement, “Cause” shall mean that the Executive:

(i)has been convicted of, or has entered a pleading of guilty or nolo contendre to, a felony (other than DUI or similar felony) or any crime involving fraud, theft, embezzlement or other act of dishonesty involving the Company;

(ii)has knowingly and intentionally participated in fraud, embezzlement, or other act of dishonesty involving the Company;

(iii)materially fails to attempt in good faith to perform Executive’s duties required under Executive’s employment by or other relationship with the Company (it being agreed that failure of the Company to achieve operating results or similar poor performance of the Company shall not, in and of itself, be deemed a failure to perform Executive’s duties);

(iv)fails to attempt in good faith to comply with a lawful directive of the CEO or the Board that is consistent with the Company’s business practices and Code of Ethics;

(v)engages in willful misconduct for which Executive receives a material and improper personal benefit at the expense of the Company, or accidental misconduct resulting in such a benefit which Executive does not promptly report to the Company and redress promptly upon becoming aware of such benefit;

(vi)in carrying out his duties under this Agreement, has engaged in acts or omissions constituting gross negligence or willful misconduct resulting in, or which, in the good faith opinion of the Board, could be expected to result in, substantial economic harm to the Company;

(vii)has failed for any reason to correct, cease or alter any action or omission that (A) materially violates or does not conform with the Company’s policies, standards or

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regulations in a material way, (B) constitutes a material breach of this Agreement or the Confidentiality Agreement (as defined below), or (C) constitutes a material breach of his duty of loyalty to the Company; or

(viii)has disclosed any Proprietary Information (as defined below) without authorization from the Board, Chief Executive Officer or General Counsel except as otherwise permitted by this Agreement, another agreement between the parties or any Company policy in effect at the time of disclosure.

For purposes of the definition of “Cause”, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties.

The Company shall provide written notice to Executive of any act or omission that the Company believes constitutes grounds for “Cause” pursuant to clause (iii), (iv) or (vii) above, and no such act or omission shall constitute “Cause” unless Executive fails to remedy such act or omission within ten (10) days of the receipt of such notice; provided that such ten (10) day cure period shall not apply with respect to any matter that is incapable of cure within such period.

(b)Due to Death or Disability. Executive’s employment shall terminate upon Executive’s death and the Company may terminate Executive’s employment due to Executive’s Disability. As used in this Agreement, “Disability” shall mean any physical or mental disability or incapacity that renders Executive incapable of fully performing the services required of Executive by the Company for a period of 180 consecutive days or for shorter periods aggregating 180 days during any twelve (12) month period. For purposes of the definition of “Disability”, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties. Any question as to the existence of a Disability upon which Executive and the Company cannot agree shall be determined by a qualified independent physician selected by Executive (or, if Executive is unable to make such selection, a selection shall be made by Executive’s spouse, if available, or if such spouse is unavailable due to death or incapacity, any other adult member of Executive’s immediate family), with the consent of the Company, which consent shall not be unreasonably withheld. The determination of such physician made in writing to the Company and Executive shall be final and conclusive for all purposes of determining Disability under this Agreement.

(c)Without Cause. The Company may terminate Executive’s employment under this Agreement at anytime Without Cause. As used in this Agreement, a termination “Without Cause” shall mean the termination of Executive’s employment by the Company other than (i) for Cause pursuant to SECTION 3.1(a) above or (ii) due to death or Disability pursuant to SECTION 3.1(b) above.

3.2By the Executive:

(a)Without Good Reason. Executive may terminate his employment under this Agreement at any time Without Good Reason. As used in this Agreement, a termination “Without Good Reason” shall mean termination of Executive’s employment by Executive other than For Good Reason pursuant to SECTION 3.2(b) below.

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(b)For Good Reason. Executive shall have the right at any time to resign his employment under this Agreement For Good Reason. As used in this Agreement, “For Good Reason” shall mean any of the following: (i) a material diminution in the Executive’s Base Salary or Target Annual Cash Bonus, (ii) a material diminution in Executive’s title, authority, duties and responsibilities as compared to Executive’s title, authority, duties and responsibilities measured immediately after the Effective Date, (iii) any requirement that the Executive report to anyone but (A) the Chief Executive Officer of the ultimate parent entity, or (B) if the Company becomes a subsidiary or a division of another entity not engaged predominantly in the same business as the Company, the most senior executive of such subsidiary or division, (iv) any material breach by the Company or related entities of this Agreement or the Executive’s other agreements with the Company or related entities, (v) the failure of any successor to all or substantially all of the Company’s business or assets to promptly assume and continue this Agreement, whether contractually or as a matter of law, within fifteen (15) days of the transaction which gives rise to the successor’s rights in this Agreement and (vi) any requirement by the Company that Executive relocate his personal residence to any city more than 50 miles from Raleigh, North Carolina.

Notwithstanding the foregoing, no event shall be a Good Reason event unless the Executive gives the Company written notice thereof within ninety (90) days of the first occurrence thereof, the Company does not cure such event within thirty (30) days of the giving of such notice and the Executive does not terminate employment prior to sixty (60) days after the end of the cure period.

3.3Compensation Upon Termination. Upon termination of Executive’s employment with the Company, the Company’s obligation to pay compensation and benefits under SECTION 2 hereof shall terminate, except that the Company shall pay to the Executive or, if applicable, the Executive’s heirs, all earned but unpaid Base Salary under SECTION 2.1(a) and accrued vacation under SECTION 2.2, in each case, through the Termination Date. If the Company terminates Executive’s employment Without Cause, for Executive’s death, for Executive’s Disability, or if Executive terminates his employment for Good Reason, then, in addition, to the foregoing compensation, upon execution and delivery (and non-revocation) by Executive of the Separation Agreement and General Release as set forth in SECTION 6.11, the Company shall pay severance benefits pursuant to SECTION 3.4 below. No other payments or compensation of any kind shall be paid in respect of Executive’s employment with or termination from the Company. In addition, Executive shall be entitled to receive any amounts or benefits due under any plan or program in accordance with the term thereof, and, other than on termination for Cause or a voluntary termination by Executive without Good Reason, his annual bonus for any completed fiscal year at the same time annual bonuses would have been paid if he had continued in employment (it being understood that in the event of any such termination Executive is not entitled to an Annual Bonus for the then-current Fiscal Year). Notwithstanding any contrary provision contained herein, in the event of any termination of Executive’s employment, the exclusive remedies available to the Executive shall be the amounts due under this SECTION 3, which are in the nature of liquidated damages, and are not in the nature of a penalty.

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3.4Severance Benefits.

(a)Termination without Cause or for Good Reason. Subject to the terms and conditions of eligibility for Executive’s receipt of severance benefits under this Agreement, including the timely execution and delivery (and non-revocation) by Executive of the Separation Agreement and General Release as set forth in SECTION 6.11, the Company shall pay to Executive, as severance benefits:

(i)An amount equal to the product of (a) the applicable Severance Multiple (as defined below)and (b) the sum of (x) the highest annual Base Salary rate for Executive in effect over the prior two (2) years and (y) the highest amount of Executive’s Target Bonus or Annual Cash Bonus actually paid over the prior two (2) years, whichever is greater, which total payment shall be paid to Executive on a salary continuation basis according to the Company’s normal payroll practices over the 18month period following the date the Executive incurs a Separation from Service, but in no event less frequently than monthly. As used herein, the “Severance Multiple” shall be 2.5 if the termination without Cause or resignation for Good Reason occurs within ninety (90) days preceding or twelve (12) months following a “Change in Control” (as defined below) and 1.5 in the case of any other termination without Cause or resignation for Good Reason.

(ii)Subject to (1) the Executive’s timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), and (2) the Executive’s continued copayment of premiums at the same level and cost to the Executive as if the Executive were an employee of the Company (excluding, for purposes of calculating cost, an employee’s ability to pay premiums with pre-tax dollars), continued participation in the Company’s group health plan (to the extent permitted under applicable law and the terms of such plan) which covers the Executive (and the Executive’s eligible dependents) for a period of 18 months at the Company’s expense, provided that the Executive is eligible and remains eligible for COBRA coverage. The Company may modify its obligation under this SECTION 3.4(a)(ii) to the extent reasonably necessary to avoid any penalty or excise taxes imposed on it in connection with the continued payment of premiums by the Company under the Patient Protection and Affordable Care Act of 2010, as amended.

(iii)In addition to the benefits described in Section 3.4(a)(i) and (ii), in the event that such termination occurs within ninety (90) days preceding or twelve (12) months following a “Change in Control” (as defined below), the Company shall accelerate the vesting of the Executive’s then-outstanding and unvested stock options, stock appreciation rights, restricted stock units or shares, performance stock units or any other Company equity compensation awards, to the extent that such awards would have vested solely upon the Executive’s continued employment, such that one hundred percent (100%) of such awards become vested in full.

(b)Termination for Executive’s Death or Disability. In the event of Executive’s death or Disability, the Company shall accelerate the vesting of the Executive’s then-outstanding and unvested stock options, stock appreciation rights, restricted stock units or shares, performance stock units or any other Company equity compensation awards, to the extent that such awards would have

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vested solely upon the Executive’s continued employment, such that one hundred percent (100%) of such awards become vested in full.

(c)Notwithstanding any other provision of this Agreement, any severance benefits that would otherwise have been paid before the Company’s first normal payroll payment date falling on or after the thirtieth (30th) day after the date on which the Executive incurs a Separation from Service (the “First Payment Date”) shall be made on the First Payment Date. Each separate severance installment payment and each other payment that Executive may be eligible to receive under this Agreement shall be a separate payment under this Agreement for all purposes.

(d)Notwithstanding anything to the contrary in this Agreement, with respect to any severance benefits or amounts payable to the Executive under this Agreement, in no event shall a termination of employment occur under this Agreement unless such termination constitutes a Separation from Service. For purposes of this Agreement, a “Separation from Service” shall mean the Executive’s “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto.

(e)Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, amounts payable to the Executive pursuant to this SECTION 3.4 shall be made in reliance upon Treas. Reg. Section 1.409A-1(b)(9) (Separation Pay Plans) or Treas. Reg. Section 1.409A-1(b)(4) (Short-Term Deferrals). However, to the extent any such payments are treated as non-qualified deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then if Executive is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which the Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of the Executive’s Separation from Service or (ii) the date of Executive’s death. Upon the earlier of such dates, all payments deferred pursuant to this SECTION 3.4(e) shall be paid in a lump sum to the Executive. Thereafter, payments will resume in accordance with this Agreement. The determination of whether the Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be made by the Company in accordance with the terms of Section 409A of the Code and applicable guidance thereunder (including without limitation Treas. Reg. Section 1.409A-1(i) and any successor provision thereto).

(f)The Executive shall have no duty or obligation to mitigate the amounts due under SECTION 3.4(a) above and any amounts earned by Executive from other employment shall not be offset or reduce the amounts due hereunder.

(g)The term “Change in Control” shall mean the occurrence of any of the following events: (i) the Board approves a plan of liquidation, dissolution or winding-up of the Company, (ii) the consummation of a sale or other disposition of all or substantially all of the assets of the Company and its subsidiaries, (iii) any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (other than the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, Gores Building Holdings,

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LLC. or its affiliates, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Common Stock of the Company), becoming the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities or otherwise acquiring the power to elect or designate a majority of the members of the Board, (iv) a merger or consolidation of the Company with any other corporation or entity (a “Merger Partner”), as a result of which (A) the voting securities of the Merger Partner outstanding immediately prior thereto represent (either by remaining outstanding or by being converted into voting securities of a surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (B) the shareholders of the Merger Partner immediately prior thereto have the power to elect or designate a majority of the members of the Board of the Company or such surviving entity; provided, however, that a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person (other than those covered by the exceptions in clause (iii) above) acquires more than 50% of the combined voting power of the Company’s then outstanding securities or the power to elect or designate a majority of the members of the Board shall not constitute a Change in Control of the Company. For the avoidance of doubt Gores Building Holdings, LLC or any of its affiliates reducing its equity holdings in the Company, directly or indirectly, shall not, in and of itself, constitute a Change in Control hereunder, unless such reduction in equity holdings is part of a transaction that constitutes a Change in Control pursuant to clauses (iii) or (iv) of this definition..

SECTION 4CERTAIN AGREEMENTS

4.1Confidentiality. Executive acknowledges that the Company owns and shall own and has developed and shall develop proprietary information concerning its business and its customers and clients (“Proprietary Information”). Such Proprietary Information includes, among other things, trade secrets, financial information, product plans, customer lists, marketing plans, systems, manuals, training materials, forecasts, inventions, improvements, know-how and other intellectual property, in each case, relating to the Company’s business. Executive shall, at all times, both during employment by the Company and thereafter, keep all Proprietary Information in confidence and trust and shall not use or disclose any Proprietary Information without the written consent of the Company, except as necessary in the ordinary course of Executive’s duties. Executive shall keep the terms of this Agreement in confidence and trust and shall not disclose such terms, except to Executive’s family, accountants, financial advisors, or attorneys, or as otherwise authorized or required by law. Executive agrees to execute the Company’s standard form of confidentiality agreement (the “Confidentiality Agreement”) applicable to all employees on the Effective Date.

4.2Company Property. Executive recognizes that all Proprietary Information, however stored or memorialized, and all identification cards, keys, flash drives, computers, mobile phones, Personal Data Assistants, telephone numbers, access codes, marketing materials, documents, records and other equipment or property which the Company provides are the sole property of the Company. Upon termination of employment, Executive shall (1) refrain from taking

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any such property from the Company’s premises, and (2) return any such property in Executive’s possession within ten (10) business days.

4.3Assignment of Inventions to the Company. Executive shall promptly disclose to the Company all improvements, inventions, formulas, processes, computer programs, know-how and trade secrets developed, whether or not patentable, made or conceived or reduced to practice or developed by Executive, either alone or jointly with others, during and related to Executive’s employment and the Company’s business or while using the Company’s equipment, supplies, facilities or trade secret information (collectively, “Inventions”). All Inventions, and other intellectual property rights shall be the sole property of the Company and shall be “works made for hire.” Executive hereby assigns to the Company any rights Executive may have or acquire in all Inventions and agrees to perform, during and after employment with the Company, at the Company’s expense including reasonable compensation to Executive, all acts reasonably necessary by the Company in obtaining and enforcing intellectual property rights with respect to such Inventions. Executive hereby irrevocably appoints the Company and its officers and agents as Executive’s attorney-in-fact to act for and in Executive’s name and stead with respect to such Inventions.

SECTION 5COVENANT NOT TO ENGAGE IN CERTAIN ACTS

5.1General. The parties understand and agree that the purpose of the restrictions contained in this Section 5 is to protect the goodwill and other legitimate business interests of the Company, and that the Company would not have entered into this Agreement in the absence of such restrictions. Executive acknowledges and agrees that the restrictions are reasonable and do not, and will not, unduly impair his ability to make a living after the termination of his or her employment with the Company. The provisions of this SECTION 5 shall survive the expiration or sooner termination of this Agreement. For purposes of this SECTION 5, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties.

5.2Non-Compete; Non-Diversion. In consideration for this Agreement to employ Executive and other valuable consideration provided hereunder, Executive agrees and covenants that during the term of employment and for a period of twelve (12) months after the Termination Date, Executive shall not, directly or indirectly, for himself or any third party, or alone or as a member of a partnership or limited liability company, or as an officer, director, shareholder, member or otherwise, engage in the following acts:

(i)divert or attempt to divert any existing business of the Company provided that after the Termination Date this shall not prevent normal competitive sales for a non-Listed Company (as defined below);

(ii)solicit, induce or entice, or seek to solicit, induce or entice, or otherwise interfere with the Company’s business relationship with, any customer of the Company, provided that after the Termination Date this shall not prevent normal competitive sales activities for a non-Listed Company;

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(iii)(A) during the term of employment, render any services (whether as an independent contractor or otherwise) on behalf of any company or line of business that competes anywhere in the United States with the Company (a “Competing Business”), and (B) for a period of twelve months after the Termination Date, render any services other than legal services (whether as an independent contractor or otherwise) on behalf of any Listed Company (as defined below);

(iv)own or control any interest in (except as a passive investor of less than two percent (2%) of the capital stock or publicly traded notes or debentures of a publicly held company), or become an officer, director, partner, member, or joint venturer of, any Competing Business, provided that after the Termination Date this shall only apply to the Listed Companies;

(v)advance credit or lend money to any third party for the purpose of establishing or operating any Competing Business, provided that after the Termination Date this shall only apply to the Listed Companies; or

(vi)with respect to any substantially full time independent contractor of the Company, employee of the Company or individual who was, at any time during the three months prior to the Termination Date, an employee of the Company: (A) hire or retain, or attempt to hire or retain, such individual to provide services for any third party; or (B) encourage, induce, solicit or attempt to solicit, divert, cause or attempt to cause, such individual to (1) terminate and/or leave his or her employment, (2) accept employment with any person or entity other than the Company, or (3) terminate his or her relationship with the Company or devote less than his or her full time efforts to the Company.

As used herein, “Listed Company” means one of nine (9) companies that are material competitors as identified by the Company, provided that the Company may at any time change such nine (9) companies to alternative competitors so long as the number does not exceed nine (9), no change can be effective after the termination of Executive’s employment with the Company and any change shall be effective thirty (30) days after Executive is given written notice thereof and only if at the end of such thirty (30) day period the Executive is employed by the Company. As of the Effective Date, the Listed Companies are Pro Build Holdings, Inc., 84 Lumber Co., Builders FirstSource, Inc., BMC Select, HD Supply, Inc., Ganahl Lumber Co., US LBM Holdings, LLC, Carter Lumber Company and McCoy Corporation (dba McCoy’s Building Supply). The parties acknowledge and agree that clause (vi) above shall not be violated by general advertising not targeted at the foregoing people nor serving as a reference upon request of the foregoing with regard to an entity with which Executive is not associated. The parties acknowledge and agree that the term “Competing Business” does not include (i) builders of light frame (wood) commercial and new residential homes or (ii) any manufacturer of lumber, building materials or equipment or appliances. Further, the Parties hereby acknowledge and agree that if Executive becomes employed by any company described in the preceding sentence, Executive shall be permitted to contact, solicit, sell to or otherwise do business with such Competing Businesses and that such activities shall not violate the terms of this Section.

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5.3Cessation/Reimbursement of Payments. If Executive violates any provision of this SECTION 5, the Company may, upon giving written notice to Executive, immediately cease all payments and benefits that it may be providing to Executive pursuant to SECTION 2 or SECTION 3, and Executive shall be required to reimburse the Company for any payments received from, and the cash value of any benefits provided by, the Company between the first day of the violation and the date such notice is given; provided, however, that the foregoing shall be in addition to such other remedies as may be available to the Company and shall not be deemed to permit Executive to forego or waive such payments in order to avoid his or her obligations under this SECTION 5; and provided, further, that any release of claims by Executive pursuant to SECTION 6.11 shall continue in effect.

5.4Survival; Injunctive Relief. Executive agrees that the provisions of this SECTION 5 shall survive the termination of this Agreement and the termination of the Executive’s employment. Executive acknowledges that a breach by him of the covenants contained in this SECTION 5 cannot be reasonably or adequately compensated in damages in an action at law and that such breach will cause the Company immeasurable and irreparable injury and damage. Executive further acknowledges that he possesses unique skills, knowledge and ability and that competition in violation of this SECTION 5 would be extremely detrimental to the Company. By reason thereof, each of the Company and Executive agrees that the other shall be entitled, in addition to any other remedies it may have under this Agreement, at law or in equity, or otherwise, to temporary, preliminary and/or permanent injunctive and other equitable relief to prevent or curtail any actual or threatened violation of this SECTION 5, without proof of actual damages that have been or may be caused to the Company by such breach or threatened breach, and waives to the fullest extent permitted by law the posting or securing of any bond by the other party in connection with such remedies.

SECTION 6MISCELLANEOUS

6.1Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by certified or registered mail, postage prepaid, with return receipt requested, telecopy (with hard copy delivered by overnight courier service), or delivered by hand, messenger or overnight courier service, and shall be deemed given when received at the addresses of the parties set forth below, or at such other address furnished in writing to the other parties hereto:

To the Company: Stock Building Supply Holdings, Inc.8020 Arco Corporate Drive, Ste. 400Raleigh, NC 27617Attn: Chief Executive OfficerFax:919-431-1180

To Executive: at the home address of Executive maintained in the human resource records of the Company.

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6.2Severability. The parties agree that it is not their intention to violate any public policy or statutory or common law. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law. Without limiting the foregoing, if any portion of Section 5 is held to be unenforceable, the maximum enforceable restriction of time, scope of activities and geographic area will be substituted for any such restrictions held unenforceable.

6.3Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of North Carolina without regard to its principles of conflicts of laws. Executive agrees to submit to the jurisdiction of the State of North Carolina; agrees that any dispute concerning the interpretation or application of this Agreement shall be heard by A JUDGE AND NOT A JURY; and agrees that any dispute shall be brought exclusively in a state or federal court of competent jurisdiction in North Carolina. Executive waives any and all objections to jurisdiction or venue.

6.4Survival. The covenants and agreements of the parties set forth in Sections 4, 5 and 6 are of a continuing nature and shall survive the expiration, termination or cancellation of this Agreement, irrespective of the reason therefor.

6.5Entire Agreement. This Agreement contains the entire understanding between the parties hereto with respect to the terms of employment, compensation, benefits, and covenants of Executive, and supersede all other prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, between Executive and the Company relating to the subject matter of the Agreement, which such other prior and contemporaneous agreements and understandings, inducements or conditions shall be deemed terminated effective immediately. For the avoidance of doubt, the parties agree that any and all indemnification agreements between Executive and the Company shall continue in full force unimpaired by this Agreement. Notwithstanding the foregoing, Executive acknowledges that the Confidentiality Agreement shall continue in effect during the term of Executive’s employment.

6.6Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the Company’s successors and assigns, including any direct or indirect successor by purchase, merger, consolidation, reorganization, liquidation, dissolution, winding up or otherwise with respect to all or substantially all of the business or assets of the Company, and the Executive’s spouse, heirs, and personal and legal representatives.

6.7Counterparts; Amendment. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be amended or modified only by written instrument duly executed by the Company and Executive.

6.8Voluntary Agreement. Executive has read this Agreement carefully and understands and accepts the obligations that it imposes upon Executive without reservation. No other promises or representations have been made to Executive to induce Executive to sign this Agreement. Executive is signing this Agreement voluntarily and freely.

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6.9Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns (including any direct or indirect successor, spouses, heirs and personal and legal representatives. Any such successor or assign of the Company shall be included in the term “Company” as used in this Agreement.

6.10Release of Claims. In consideration for the compensation and other benefits provided pursuant to this Agreement, Executive agrees to execute a “Separation Agreement and General Release” form substantially in the form of Exhibit A attached hereto and incorporated herein by this reference. The Company’s obligation to pay severance benefits pursuant to SECTION 3.4 is expressly conditioned on Executive’s execution and delivery of such Separation Agreement and General Release no later than forty-five (45) days after the date the Executive incurs a Separation from Service without revoking it for a period of seven (7) days following delivery. Executive’s failure to execute and deliver such Separation Agreement and General Release within such forty-five (45) day time period (or Executive’s subsequent revocation of such Separation Agreement and General Release) will void the Company’s obligation to pay severance benefits under this Agreement.

6.11Confidentiality Of Previous Employers’ Information. The Company acknowledges that the Executive may have had access to confidential and proprietary information of his previous employer(s) and that Executive may be obligated to maintain the confidentiality of such information, not use such information or not to provide certain services to the Company, in each case pursuant to applicable law and/or any contractual relationship between Executive and a previous employer. The Company hereby instructs Executive as follows: (1) Executive shall not disclose any such confidential or proprietary information to the Company or any of its affiliates, (2) Executive shall not use any such confidential or proprietary information in connection with his employment with the Company, and (3) Executive shall not perform any services for the benefit of the Company that would cause Executive to be in breach of his obligations owed to any previous employer or other third party. If the Company requests Executive to provide any such services or to disclose any such information, Executive will advise the Company that he or she is prohibited from doing so. Executive agrees to indemnify, defend and hold the Company and its affiliates harmless from and against any claims, losses or liabilities (including reasonable attorneys’ fees) incurred by the Company or any of its affiliates as a result of any breach by Executive of this SECTION 6.11.

6.12In-kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement, in-kind benefits and reimbursements provided under this Agreement during any tax year of the Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of the Executive, except for the reimbursement of medical expenses referred to in Section 105(b) of the Code, and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to the Executive as soon as administratively practicable following such submission, but in no event later than December 31st of the calendar year following the calendar year in which the expense was incurred. In no event shall the Executive be entitled to any reimbursement payments after December 31st of the calendar year following the calendar year in which the expense was incurred. This

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SECTION 6.12 shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to the Executive.

6.13Section 409A. This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under this Agreement become subject to (a) the gross income inclusion set forth within Code Section 409A(a)(1)(A) or (b) the interest and additional tax set forth within Code Section 409A(a)(1)(B) (together, referred to herein as the “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. In no event shall the Company be required to provide a tax gross-up payment to Executive or otherwise reimburse Executive with respect to Section 409A Penalties. In the event that following the date hereof the Company reasonably determines that any compensation or benefits payable under this Agreement may be subject to Section 409A of the Code, the Company and the Executive shall work together to adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to (x) exempt the compensation and benefits payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (y) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.

6.14Indemnification, etc. The Company shall indemnify and hold harmless Executive to the fullest extent permitted by law (including advance of legal fees) for any action or inaction he takes in good faith with regard to the Company or parent or any benefit plan of either. Further, the Company shall cover Executive on its directors’ and officers’ liability insurance policies to no less extent than that which covers any other officer or director of the Company.

[signatures on following page]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

COMPANY:		EXECUTIVE:
STOCK BUILDING SUPPLYHOLDINGS, INC.
By:	/s/ Jeffrey G. Rea	/s/ C. Lowell Ball
Name:	Jeffrey G. Rea	C. LOWELL BALL
Its:	President and Chief Executive Officer

Signature Page to Employment Agreement

EXHIBIT ASEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (this “Agreement”) is made as of ________________________ by and between C. LOWELL BALL (“Executive”) and STOCK BUILDING SUPPLY HOLDINGS, INC. (the “Company”). For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.Termination of Employment. The parties agree that Executive’s employment with the Company and all of its affiliates is terminated effective as of _____________ (the “Effective Date”).

2.Payments Due to Executive. Executive acknowledges receipt of $______________ from the Company, representing Executive’s accrued but unpaid Base Salary through the Effective Date. Other than as expressly set forth in this Section, Executive is not entitled to any consulting fees, wages, accrued vacation pay, benefits or any other amounts with respect to his employment through the Effective Date.

3.Severance Benefits and Continuing Health Insurance Coverage. In consideration of Executive’s execution and non-revocation of this Agreement, the Company agrees to pay to Executive the amounts provided in SECTION 3.4 of that certain Employment Agreement, dated as of ____________ by and between the Executive and the Company.

4.General Release.

(a)Executive, on behalf of Executive, his or her heirs, executors, personal representatives, administrators and assigns, irrevocably, knowingly and unconditionally releases, remises and discharges the Company, its parents, all current or former affiliated or related companies of the Company and its parent, partnerships, or joint ventures, and, with respect to each of them, all of the Company’s or such related entities’ predecessors and successors, and with respect to each such entity, its officers, directors, managers, Executives, equity holders, advisors and counsel (collectively, the “Company Parties”) from any and all actions, causes of action, charges, complaints, claims, damages, demands, debts, lawsuits, rights, understandings and obligations of any kind, nature or description whatsoever, known or unknown (collectively, the “Claims”), arising out of or relating to the Executive’s employment with the Company and/or the separation of Executive from the Company.

(b)This general release of Claims by Executive includes, without limitation, (i) all Claims based upon actions or omissions (or alleged actions or omissions) that have occurred up to and including the date of this Agreement, regardless of ripeness or other limitation on immediate pursuit of any Claim in the absence of this Agreement; (ii) all Claims relating to or arising out of Executive’s employment with and separation from the Company; (iii) all Claims (including Claims for discrimination, harassment, and retaliation) arising under any federal, state or local statute, regulation, ordinance, or the common law, including without limitation, Claims arising under Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Age Discrimination

in Employment Act, as amended, the Family and Medical Leave Act and the Executive Retirement Income Security Act of 1974, the Civil Rights Act of 1991, the Equal Pay Act, the Fair labor Standards Act, 42 U.S.C. § 1981, and any other federal or state law, local ordinance or common law including for wrongful discharge, breach of implied or express contract, intentional or negligent infliction of emotional distress, defamation or other tort; and (iv) all Claims for reinstatement, attorney’s fees, interest, costs, wages or other compensation.

(c)Executive agrees that there is a risk that each and every injury which he or she may have suffered by reason of his or her employment relationship might not now be known, and there is a further risk that such injuries, whether known or unknown at the date of this Agreement, might become progressively worse, and that as a result thereof further damages may be sustained by Executive; nevertheless, Executive desires to forever and fully release and discharge the Company Parties, and he or she fully understands that by the execution of this Agreement no further claims for any such injuries may ever be asserted.    

(d)This general release does not release any Claim that relates to: (i) Executive’s right to enforce this Agreement; (ii) any rights Executive may have to indemnification from personal liability or to protection under any insurance policy maintained by the Company, including without limitation any general liability, EPLI, or directors and officers insurance policy or any contractual indemnification agreement; (iii) Executive’s right, if any, to government-provided unemployment and worker’s compensation benefits; or (iv) Executive’s rights under any Company Executive benefit plans (i.e. health, disability or retirement plans), which by their explicit terms survive the termination of Executive’s employment.

(e)Executive agrees that the consideration set forth in Paragraph 3 above shall constitute the entire consideration provided under this Agreement, and that Executive will not seek from the Company Parties any further compensation or other consideration for any claimed obligation, entitlement, damage, cost or attorneys’ fees in connection with the matters encompassed by this Agreement.

(f)Executive understands and agrees that if any facts with respect to this Agreement or Executive’s prior treatment by or employment with the Company are found to be different from the facts now believed to be true, Executive expressly accepts, assumes the risk of, and agrees that this Agreement shall remain effective notwithstanding such differences. Executive agrees that the various items of consideration set forth in this Agreement fully compensate for said risks, and that Executive will have no legal recourse against the Company in the event of discovery of a difference in facts.

(g)Executive agrees to the release of all known and unknown claims, including expressly the waiver of any rights or claims arising out of the Federal Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”), and in connection with such waiver of ADEA claims, and as provided by the Older Worker Benefit Protection Act, Executive understands and agrees as follows:

i Executive has the right to consult with an attorney before signing this Agreement, and is hereby advised to do so;

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ii Executive shall have a period of forty-five (45) days from the Termination Date (or from the date of receipt of this Agreement if received after the Termination Date) in which to consider the terms of the Agreement (the “Review Period”). Executive may at his or her option execute this Agreement at any time during the Review Period. If the Executive does not return the signed Agreement to the Company prior to the expiration of the 45 day period, then the offer of severance benefits set forth in this Agreement shall lapse and shall be withdrawn by the Company;

iii Executive may revoke this Agreement at any time during the first seven (7) days following Executive’s execution of this Agreement, and this Agreement and release shall not be effective or enforceable until the seven-day period has expired (“Revocation Period Expiration Date”). Notice of a revocation by the Executive must be made to the designated representative of the Company (as described below) within the seven (7) day period after Executive signs this Agreement. If Executive revokes this Agreement, it shall not be effective or enforceable. Accordingly, the “Effective Date” of this Agreement shall be on the eighth (8th) day after Executive signs the Agreement and returns it to the Company, and provided that Executive does not revoke the Agreement during the seven (7) day revocation period;

In the event Executive elects to revoke this release pursuant to Paragraph 4(g)iii above, Executive shall notify Company by hand-delivery, express courier or certified mail, return receipt requested, within seven (7) days after signing this Agreement to: ATTN: General Counsel, Legal Department, Stock Building Supply Holdings, Inc., 8020 Arco Corporate Drive, Suite 400, Raleigh, North Carolina 27617. In the event that Executive exercises his or her right to revoke this release pursuant to Paragraph 4(g)iii above, any and all obligations of Company under this Agreement shall be null and void. Executive agrees that by signing this Agreement prior to the expiration of the forty-five (45) day period he or she has voluntarily waived his or her right to consider this Agreement for the full forty-five (45) day period.

EXECUTIVE AGREES THAT THE CONSIDERATION RECEIVED BY HIM OR HER UNDER THIS AGREEMENT, INCLUDING THE PAYMENTS DESCRIBED ABOVE, IS IN FULL AND COMPLETE SATISFACTION OF ANY CLAIMS THAT EXECUTIVE MAY HAVE, OR MAY HAVE HAD, ARISING OUT OF EXECUTIVE’S EMPLOYMENT WITH COMPANY (INCLUDING FOR THE AVOIDANCE OF DOUBT, ALL OF ITS SUBSIDIARIES OR AFFILIATES) OR THE TERMINATION OF THAT EMPLOYMENT, UP TO THE DATE OF EXECUTION OF THIS AGREEMENT. EXECUTIVE ACKNOWLEDGES THAT HE OR SHE UNDERSTANDS THAT, BY ENTERING INTO THIS AGREEMENT, HE OR SHE NO LONGER HAS THE RIGHT TO ASSERT ANY CLAIM OR LAWSUIT OF ANY KIND ATTEMPTING TO RECOVER MONEY OR ANY OTHER REILEF AGAINST THE COMPANY PARTIES FOR ACTS OR INJURIES ARISING OUT OF EXECUTIVE’S FORMER EMPLOYMENT BY COMPANY (INCLUDING FOR THE AVOIDANCE OF DOUBT, ALL OF ITS SUBSIDIARIES OR AFFILIATES) OR THE TERMINATION OF THAT EMPLOYMENT. Such claims further include any claims Executive may have pursuant to an internal grievance procedure at Company (including for the avoidance of doubt, all of its subsidiaries or affiliates). Executive does not waive any rights or claims that may arise after the date this Agreement is executed.

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5.Review of Agreement; No Assignment of Claims. Executive represents and warrants that he or she (a) has carefully read and understands all of the provisions of this Agreement and has had the opportunity for it to be reviewed and explained by counsel to the extent Executive deems it necessary, (b) is voluntarily entering into this Agreement, (c) has not relied upon any representation or statement made by the Company or any other person with regard to the subject matter or effect of this Agreement, (d) has not transferred or assigned any Claims and (e) has not filed any complaint or charge against any of the Company Parties with any local, state, or federal agency or court.

6.No Claims. Each party represents that it has not filed any Claim against the other Party with any state, federal or local agency or court and that it will not file any Claim at any time regarding the matters covered by this Agreement; provided, however, that nothing in this Agreement shall be construed to prohibit Executive from filing a Claim, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission; provided, further, that Executive acknowledges that he will not be entitled to recover any monetary or other damages in connection with or as a result of any such EEOC or state FEP agency proceeding.

7.Interpretation. This Agreement shall take effect as an instrument under seal and shall be governed and construed in accordance with the laws of the State of North Carolina without regard to provisions or principles thereof relating to conflict of laws.

8.Agreement as Defense. This Agreement may be pleaded as a full and complete defense to any subsequent action or other proceeding arising out of, relating to, or having anything to do with any and all Claims, counterclaims, defenses or other matters capable of being alleged, which are specifically released and discharged by this Agreement. This Agreement may also be used to abate any such action or proceeding and/or as a basis of a cross-complaint for damages.

9.Nondisclosure of Agreement. The terms and conditions of this Agreement are confidential. Executive agrees not to disclose the terms of this Agreement to anyone except immediate family members and Executive’s attorneys and financial advisers. Executive further agrees to inform these people that the Agreement is confidential and must not be disclosed to anyone else. Executive may disclose the terms of this Agreement if compelled to do so by a court, but Executive agrees to notify the Company immediately if anyone seeks to compel Executive’s testimony in this regard, and to cooperate with the Company if the Company decides to oppose such effort. Executive agrees that disclosure by Executive in violation of this Agreement would cause so much injury to the Company that money alone could not fully compensate the Company and that the Company is entitled to injunctive and equitable relief. Executive also agrees that the Company would be entitled to recover money from Executive if this Agreement were violated.

10.Ongoing Covenants. Executive acknowledges that nothing in this Agreement shall limit or otherwise impact Executive’s continuing obligations of confidentiality to the Company in accordance with Company policy and applicable law, or any applicable Company policies or agreements between the Company and Executive with respect to non-competition or non-solicitation, and Executive covenants and agrees to abide by all such continuing obligations.

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11.No Adverse Comments. For two (2) years, Executive and the Company agree not to make, issue, release or authorize any written or oral statements, derogatory or defamatory in nature, about the other (which in the case of the Company shall include its affiliates or their respective products, services, directors, officers or Executives), provided that the foregoing shall not be violated by truthful testimony in response to legal process, normal competitive statements, rebuttal of statements by the other or actions to enforce the party’s rights.

12.Integration; Severability. The terms and conditions of this Agreement constitute the entire agreement between Company and Executive and supercede all previous communications, either oral or written, between the parties with respect to the subject matter of this Agreement. No agreement or understanding varying or extending the terms of this Agreement shall be binding upon either party unless in writing signed by or on behalf of such party. In the event that a court finds any portion of this Agreement unenforceable for any reason whatsoever, Company and Executive agree that the other provisions of the Agreement shall be deemed to be severable and will continue in full force and effect to the fullest extent permitted by law.

EXECUTIVE ACKNOWLEDGES THE FOLLOWING: HE OR SHE HAS ENTERED INTO THIS AGREEMENT KNOWINGLY, VOLUNTARILY AND OF HIS OR HER OWN FREE WILL WITH A FULL UNDERSTANDING OF ITS TERMS; HE OR SHE HAS READ THIS AGREEMENT; THAT HE OR SHE FULLY UNDERSTANDS ITS TERMS; THAT EXECUTIVE IS ADVISED TO CONSULT AN ATTORNEY FOR ADVICE; THAT HE OR SHE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT; THAT HE OR SHE HAS HAD AMPLE TIME TO CONSIDER HIS OR HER DECISION BEFORE ENTERING INTO THE AGREEMENT. EXECUTIVE ACKNOWLEDGES THAT HE OR SHE IS SATISFIED WITH THE TERMS OF THIS AGREEMENT AND AGREES THAT THE TERMS ARE BINDING UPON HIM OR HER.

IN WITNESS WHEREOF, the parties have executed this Agreement with effect as of the date first above written.

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EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY THE COMPANY OF HIS ABILITY TO TAKE ADVANTAGE OF THE CONSIDERATION PERIOD AFFORDED BY PARAGRAPH 4 ABOVE AND THAT HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.

IN WITNESS WHEREOF, the parties have executed this Agreement with effect as of the date first above written.

C. LOWELL BALL

STOCK BUILDING SUPPLY HOLDINGS, INC.

By:

Name:

Title:

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Jeffrey G. Rea, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Stock Building Supply Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 28, 2014

/s/ Jeffrey G. Rea    
Jeffrey G. Rea
President and Chief Executive Officer
(principal executive officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, James F. Major, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Stock Building Supply Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 28, 2014

/s/ James F. Major, Jr.    
James F. Major, Jr.
Executive Vice President, Chief
Financial Officer and Treasurer
(principal financial officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Stock Building Supply Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2014, as filed with the Securities and Exchange Commission (the “Report”), I, Jeffrey G. Rea, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 28, 2014

/s/ Jeffrey G. Rea    
Jeffrey G. Rea
President and Chief Executive Officer
(principal executive officer)

A signed original of this written statement required by Section 906 has been provided to Stock Building Supply Holdings, Inc. and will be retained by Stock Building Supply Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Stock Building Supply Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2014, as filed with the Securities and Exchange Commission (the “Report”), I, James F. Major, Jr., Executive Vice President, Chief Financial Officer and Treasurer of the Company, certify pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 28, 2014

/s/ James F. Major, Jr.    
James F. Major, Jr.
Executive Vice President, Chief
Financial Officer and Treasurer
(principal financial officer)

A signed original of this written statement required by Section 906 has been provided to Stock Building Supply Holdings, Inc. and will be retained by Stock Building Supply Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Secured Credit Agreement (Details) (USD $)	9 Months Ended
	Sep. 30, 2014		Dec. 31, 2013
Line of Credit Facility [Line Items]
Revolving line of credit	$ 81,816,000		$ 59,072,000
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member]
Line of Credit Facility [Line Items]
Maturity date	Dec. 31, 2017
Maximum borrowing capacity	200,000,000	[1]
Unused capacity, commitment fee percentage	0.25%
Minimum fixed charge coverage ratio	1.00
Threshold for minimum adjusted liquidity	20,000,000
Minimum adjusted liquidity for 30 consecutive days	20,000,000
Remaining borrowing capacity	100,400,000		71,000,000
Letters of credit, amount outstanding	9,200,000.0		8,900,000
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | Fair Value, Inputs, Level 2 [Member]
Line of Credit Facility [Line Items]
Revolving line of credit	81,816,000		59,072,000
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | 85% of eligible accounts receivable [Member]
Line of Credit Facility [Line Items]
Borrowing base, percentage of accounts receivable	85.00%
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | Lesser of 90% of eligible credit card receivables and $5 million [Member]
Line of Credit Facility [Line Items]
Borrowing base, percentage of credit card receivables	90.00%
Portion of borrowing base	5,000,000
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | Lesser of $150 million, 65% of the eligible inventory or 85% of the net liquidation value of eligible inventory [Member]
Line of Credit Facility [Line Items]
Borrowing base, percentage of eligible inventory	65.00%
Borrowing base, percentage of net liquidation value of eligible inventory	85.00%
Portion of borrowing base	150,000,000
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | Lesser of $30 million, 85% of the net liquidation value of eligible fixed assets or the net book value of fixed assets [Member]
Line of Credit Facility [Line Items]
Borrowing base, percentage of net liquidation value of eligible fixed assets	85.00%
Portion of borrowing base	30,000,000
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Revolving line of credit	81,000,000		52,000,000
Interest rate at period end	1.70%		1.90%
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | Base Rate [Member]
Line of Credit Facility [Line Items]
Revolving line of credit	$ 800,000		$ 7,100,000
Interest rate at period end	3.80%		4.00%
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | Base Rate Option [Member] | Federal Funds Rate [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	0.50%
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | Base Rate Option [Member] | Base Rate [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	0.50%	[2]
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | Base Rate Option [Member] | Base Rate [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.00%	[2]
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | LIBOR Rate Option [Member] | LIBOR [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.50%	[2]
Revolving Credit Facility [Member] | Wells Fargo Capital Finance [Member] | LIBOR Rate Option [Member] | LIBOR [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.00%	[2]

[1] The Revolver’s borrowing base is calculated as the sum of (i) 85% of the Company’s eligible accounts receivable plus (ii) the lesser of 90% of the eligible credit card receivables and $5 million plus (iii) the lesser of $150 million, 65% of the eligible inventory or 85% of the net liquidation value of eligible inventory as defined in the Credit Agreement plus (iv) the lesser of $30 million, 85% of the net liquidation value of eligible fixed assets or the net book value of fixed assets, all as defined in the Credit Agreement, minus (v) reserves from time to time set by the administrative agent. The Company’s borrowing base can also be increased pursuant to certain terms outlined in the Credit Agreement.

[2] Base Rate is the higher of (i) the Federal Funds Rate plus 0.5% or (ii) the prime rate.

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Income (Loss) Per Common Share (Schedule of anti-dilutive securities) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	823,566	689,713	820,517	689,713
Nonvested stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	44,245	618,319	44,245	618,319
Restricted stock units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	10,000	0	10,000

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Segments (Narrative) (Details)	9 Months Ended
	Sep. 30, 2014 segment
Segment Reporting Information [Line Items]
Number of reportable segments	1

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Acquisitions (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended		0 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Apr. 08, 2013 Chesapeake [Member]	Sep. 30, 2014 Chesapeake [Member]	Sep. 30, 2013 Chesapeake [Member] Selling, general and administrative expenses [Member]	Sep. 30, 2013 Chesapeake [Member] Selling, general and administrative expenses [Member]	Apr. 08, 2013 Customer relationships [Member] Chesapeake [Member]
Business Acquisition [Line Items]
Date of acquisition					Apr. 08, 2013
Acquisition purchase price, including holdback					$ 2,600,000
Initial holdback amount					200,000
Payment of holdback amount						200,000
Acquisition costs	0	0	0	257,000			0	200,000
Total assets acquired					3,100,000
Total liabilities assumed					1,400,000
Intangible assets acquired									1,200,000
Goodwill					$ 700,000

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Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Schedule of discontinued operations, income statement and balance sheet

The operating results of the discontinued operations for the three and nine months endedSeptember 30,2014 and 2013 are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2014			2013			2014			2013
Net sales	$	—		$	—		$	—		$	—
Restructuring charges	(3		)	(7		)	(18		)	(25		)
Gain before income taxes	65			144			341			578
Income tax expense	(25		)	(54		)	(133		)	(237		)
Net income	40			90			208			341

The assets and liabilities of discontinued operations reflected on the consolidated balance sheets at September 30, 2014 and December 31, 2013 are as follows:

(in thousands)	September 30,   2014		December 31,   2013
Real estate held for sale	$	—	$	700
Prepaid expenses and other current assets	7		8
Current assets of discontinued operations	7		708
Accrued expenses and other liabilities	265		37
Current portion of restructuring reserve	141		295
Current liabilities of discontinued operations	406		332
Long-term portion of restructuring reserve	—		89
Long-term liabilities of discontinued operations	$	—	$	89

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Stock Based Compensation (Summary of non-vested stock and restricted stock units) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Nonvested stock [Member]
Number of shares/units outstanding (in shares):
December 31, 2013 (in shares)	427,993
Granted (in shares)	44,245
Vested/exercised (in shares)	(35,566)
Forfeited (in shares)	0
September 30, 2014 (in shares)	436,672
Weighted average grant date fair value (in dollars per share):
December 31, 2013 (in dollars per share)	$ 15.72
Granted (in dollars per share)	$ 20.34
Vested/exercised (in dollars per share)	$ 4.62
Forfeited (in dollars per share)	$ 0
September 30, 2014 (in dollars per share)	$ 17.09
Restricted stock units [Member]
Number of shares/units outstanding (in shares):
December 31, 2013 (in shares)	10,000
Granted (in shares)	11,124
Vested/exercised (in shares)	(5,000)
Forfeited (in shares)	0
September 30, 2014 (in shares)	16,124
Weighted average grant date fair value (in dollars per share):
December 31, 2013 (in dollars per share)	$ 13.96
Granted (in dollars per share)	$ 18.39
Vested/exercised (in dollars per share)	$ 13.96
Forfeited (in dollars per share)	$ 0
September 30, 2014 (in dollars per share)	$ 17.02

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Restructuring Costs (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	$ 2,136,000	$ 3,602,000
Current portion of restructuring reserve	998,000	1,594,000
Work force reductions [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	61,000	190,000
Restructuring reserve completion date	Jan. 31, 2015
Store closures [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	2,075,000	3,412,000
Restructuring reserve completion date	Jan. 31, 2017
Other Long-term Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Long-term restructuring reserve	$ 1,100,000

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Income (Loss) Per Common Share (Basic and Diluted EPS) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Basic EPS
Income (loss) from continuing operations	$ 4,934	$ (5,603)	$ 7,105	$ (7,933)
Redeemable Class B Senior Preferred stock deemed dividend	0	(363)	0	(1,836)
Income (loss) attributable to common stockholders, from continuing operations	4,934	(5,966)	7,105	(9,769)
Income from discontinued operations, net of tax	40	90	208	341
Income (loss) attributable to common stockholders	4,974	(5,876)	7,313	(9,428)
Weighted average outstanding shares of common stock (in shares)	25,733,833	19,813,209	25,713,688	15,718,667
Income (loss) from continuing operations (in dollars per share)	$ 0.19	$ (0.30)	$ 0.27	$ (0.62)
Income from discontinued operations (in dollars per share)	$ 0.00	$ 0.00	$ 0.01	$ 0.02
Net income (loss) per share (in dollars per share)	$ 0.19	$ (0.30)	$ 0.28	$ (0.60)
Diluted EPS
Income (loss) from continuing operations	4,934	(5,603)	7,105	(7,933)
Redeemable Class B Senior Preferred stock deemed dividend	0	(363)	0	(1,836)
Income (loss) attributable to common stockholders, from continuing operations	4,934	(5,966)	7,105	(9,769)
Income from discontinued operations, net of tax	40	90	208	341
Income (loss) attributable to common stockholders	$ 4,974	$ (5,876)	$ 7,313	$ (9,428)
Weighted average outstanding shares of common stock (in shares)	25,733,833	19,813,209	25,713,688	15,718,667
Weighted average shares and dilutive shares (in shares)	26,229,323	19,813,209	26,218,405	15,718,667
Income (loss) from continuing operations (in dollars per share)	$ 0.19	$ (0.30)	$ 0.27	$ (0.62)
Income from discontinued operations (in dollars per share)	$ 0.00	$ 0.00	$ 0.01	$ 0.02
Net income (loss) per share (in dollars per share)	$ 0.19	$ (0.30)	$ 0.28	$ (0.60)
Nonvested stock [Member]
Diluted EPS
Stock based payment arrangements (in shares)	357,177	0	359,941	0
Stock options [Member]
Diluted EPS
Stock based payment arrangements (in shares)	133,604	0	140,395	0
Restricted stock units [Member]
Diluted EPS
Stock based payment arrangements (in shares)	4,709	0	4,381	0

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Acquisitions

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Acquisitions

Acquisitions

For all acquisitions, the Company allocates the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition. The market approach, which indicates value based on available market pricing for comparable assets, is utilized to estimate the fair value of inventory, property and equipment. The income approach, which indicates value based on the present value of future cash flows, is primarily used to value intangible assets. The cost approach, which estimates values by determining the current cost of replacing an asset with another of equivalent utility, is used, as appropriate, for certain assets for which the market and income approaches could not be applied due to the nature of the asset.

Chesapeake Structural Systems

On April 8, 2013, Commonwealth Acquisition Holdings, LLC, a wholly-owned subsidiary of the Company, purchased certain assets and assumed certain liabilities of Chesapeake Structural Systems, Inc., Creative Wood Products, LLC and Chestruc, LLC (collectively “Chesapeake”) for an adjusted purchase price of $2.6 million. This amount included an initial holdback amount of $0.2 million, which was paid to the sellers during the nine months ended September 30, 2014. The acquisition provides the Company with component manufacturing capability to serve customers in the Central and Northern Virginia markets. The Company incurred transaction costs of $0 and $0.2 million during the three and nine months ended September 30, 2013, respectively, which are included in selling, general and administrative expenses on the condensed consolidated statements of operations. The impact of this acquisition on our operating results was not considered material for the reporting of pro forma financial information.

The Company acquired total assets of $3.1 million and assumed liabilities of $1.4 million. The assets acquired include a customer relationship intangible asset of $1.2 million. Goodwill of $0.7 million arising from the acquisition consists of expected synergies and cost savings from excess purchase price over identifiable intangible net assets, as well as intangible assets that do not qualify for separate recognition, such as assembled workforce. All of the goodwill from this transaction is expected to be deductible for income tax purposes.

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Stock Based Compensation (Summary of stock option awards) (Details) (Stock options [Member], USD $)	9 Months Ended
	Sep. 30, 2014
Stock options [Member]
Number of options outstanding (in shares):
December 31, 2013 (in shares)	714,484
Granted (in shares)	362,939
Vested/exercised (in shares)	(14,804)
Forfeited (in shares)	(27,000)
September 30, 2014 (in shares)	1,035,619
Weighted average exercise price (in dollars per share):
December 31, 2013 (in dollars per share)	$ 9.98
Granted (in dollars per share)	$ 20.29
Vested/exercised (in dollars per share)	$ 0.97
Forfeited (in dollars per share)	$ 14.00
September 30, 2014 (in dollars per share)	$ 13.62

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Stock Based Compensation (Tables)

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of expenses related to share-based payments

The following table highlights the expense related to stock based compensation for the three and nine months endedSeptember 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2014		2013		2014		2013
Nonvested stock	$	263	$	171	$	651	$	307
Stock options	537		129		1,072		257
Restricted stock units	68		9		125		9
Stock based compensation	$	868	$	309	$	1,848	$	573

Schedule of nonvested stock awards, restricted stock units and stock option activity

The following is a summary of nonvested stock, restricted stock unit and stock option activity for the nine months endedSeptember 30, 2014:

	Nonvested Stock				Restricted Stock Units				Stock Options
	Number of Shares Outstanding		Weighted Average Grant Date Fair Value		Number of Units Outstanding		Weighted Average Grant Date Fair Value		Number of Options Outstanding		Weighted Average Exercise Price
December 31, 2013	427,993		$	15.72	10,000		$	13.96	714,484		$	9.98
Granted	44,245		20.34		11,124		18.39		362,939		20.29
Vested/exercised	(35,566	)	4.62		(5,000	)	13.96		(14,804	)	0.97
Forfeited	—		—		—		—		(27,000	)	14.00
September 30, 2014	436,672		$	17.09	16,124		$	17.02	1,035,619		$	13.62

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Secured Credit Agreement (Tables)

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Schedule of secured credit agreement

The following is a summary of the significant terms of the Revolver as of September 30, 2014:

Maturity	December 31, 2017
Interest/Usage Rate	Company’s option of Base Rate(a) plus a Base Rate Margin (ranges from 0.50%–1.00% based on Revolver availability) or London Inter Bank Offered Rate ("LIBOR") plus a LIBOR Rate Margin (ranges from 1.50%–2.00% based on Revolver availability)
Maximum Availability	Lesser of $200 million or the borrowing base(b)
Periodic Principal Payments	None

(a) Base Rate is the higher of (i) the Federal Funds Rate plus 0.5% or (ii) the prime rate.

(b) The Revolver’s borrowing base is calculated as the sum of (i) 85% of the Company’s eligible accounts receivable plus (ii) the lesser of 90% of the eligible credit card receivables and $5 million plus (iii) the lesser of $150 million, 65% of the eligible inventory or 85% of the net liquidation value of eligible inventory as defined in the Credit Agreement plus (iv) the lesser of $30 million, 85% of the net liquidation value of eligible fixed assets or the net book value of fixed assets, all as defined in the Credit Agreement, minus (v) reserves from time to time set by the administrative agent. The Company’s borrowing base can also be increased pursuant to certain terms outlined in the Credit Agreement.

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Segments (Schedule of net sales, adjusted EBITDA and certain other measures by reportable segment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Net sales	$ 354,060	$ 328,468	$ 978,629	$ 891,847
Gross profit	84,392	75,381	231,848	200,681
Depreciation & amortization	3,298	3,032	9,744	9,058
Total Assets	386,223		386,223		318,540
Operating segments [Member] | Geographic divisions [Member]
Segment Reporting Information [Line Items]
Net sales	338,998	315,918	938,841	857,101
Gross profit	81,844	72,908	224,964	193,526
Depreciation & amortization	2,963	2,829	8,927	8,377
Adjusted EBITDA	21,684	16,757	51,872	36,129
Total Assets	350,891		350,891
Operating segments [Member] | Coleman Floor [Member]
Segment Reporting Information [Line Items]
Net sales	15,062	12,550	39,788	34,746
Gross profit	2,548	2,473	6,884	7,155
Depreciation & amortization	30	28	84	93
Adjusted EBITDA	208	581	(389)	1,405
Total Assets	9,966		9,966
Other reconciling items [Member] | Other reconciling items [Member]
Segment Reporting Information [Line Items]
Net sales	0	0	0	0
Gross profit	0	0	0	0
Depreciation & amortization	305	175	733	588
Adjusted EBITDA	(8,684)	(6,898)	(25,225)	(19,289)
Total Assets	$ 25,366		$ 25,366

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Segments (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Schedule of net sales, adjusted EBITDA and certain other measures by reportable segment

The following tables present Net Sales, Adjusted EBITDA and certain other measures for the reportable segment and total continuing operations for the three and nine months endedSeptember 30, 2014 and 2013.

	Three Months Ended September 30, 2014									September 30,   2014
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA			Total Assets
Geographic divisions	$	338,998	$	81,844	$	2,963	$	21,684		$	350,891
Coleman Floor	15,062		2,548		30		208			9,966
Other reconciling items	—		—		305		(8,684		)	25,366
	$	354,060	$	84,392	$	3,298				$	386,223

	Three Months Ended September 30, 2013
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	315,918	$	72,908	$	2,829	$	16,757
Coleman Floor	12,550		2,473		28		581
Other reconciling items	—		—		175		(6,898		)
	$	328,468	$	75,381	$	3,032

	Nine Months Ended September 30, 2014
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	938,841	$	224,964	$	8,927	$	51,872
Coleman Floor	39,788		6,884		84		(389		)
Other reconciling items	—		—		733		(25,225		)
	$	978,629	$	231,848	$	9,744

	Nine Months Ended September 30, 2013
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	857,101	$	193,526	$	8,377	$	36,129
Coleman Floor	34,746		7,155		93		1,405
Other reconciling items	—		—		588		(19,289		)
	$	891,847	$	200,681	$	9,058

Reconciliation to consolidated financial statements:

Reconciliation to consolidated financial statements:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2014			2013			2014			2013
Net income (loss), as reported	$	4,974		$	(5,513	)	$	7,313		$	(7,592	)
Interest expense	712			892			2,011			3,150
Income tax expense	2,972			1,989			4,417			1,076
Depreciation and amortization	3,298			3,032			9,744			9,058
Impairment of assets held for sale	—			—			48			—
Public offering transaction-related costs	60			9,322			508			10,008
Restructuring expense	2			31			11			130
Discontinued operations, net of taxes	(40		)	(90		)	(208		)	(341		)
Management fees	37			239			126			1,205
Non-cash compensation expense	868			309			1,848			573
Acquisition costs	—			—			—			257
Severance and other items related to store closures	325			229			440			721
Adjusted EBITDA of Coleman Floor	(208		)	(581		)	389			(1,405		)
Adjusted EBITDA of other reconciling items	8,684			6,898			25,225			19,289
Adjusted EBITDA of geographic divisions reportable segment	$	21,684		$	16,757		$	51,872		$	36,129

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Income (Loss) Per Common Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Schedule of basic and diluted EPS calculations

Basic EPS

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands, except share and per share amounts)	2014		2013			2014		2013
Income (loss) from continuing operations	$	4,934	$	(5,603	)	$	7,105	$	(7,933	)
Redeemable Class B Senior Preferred stock deemed dividend	—		(363		)	—		(1,836		)
Income (loss) attributable to common stockholders, from continuing operations	4,934		(5,966		)	7,105		(9,769		)
Income from discontinued operations, net of tax	40		90			208		341
Income (loss) attributable to common stockholders	$	4,974	$	(5,876	)	$	7,313	$	(9,428	)
Weighted average outstanding shares of common stock	25,733,833		19,813,209			25,713,688		15,718,667
Basic EPS
Income (loss) from continuing operations	$	0.19	$	(0.30	)	$	0.27	$	(0.62	)
Income from discontinued operations	—		—			0.01		0.02
Net income (loss) per share	$	0.19	$	(0.30	)	$	0.28	$	(0.60	)

Diluted EPS

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands, except share and per share amounts)	2014		2013			2014		2013
Income (loss) from continuing operations	$	4,934	$	(5,603	)	$	7,105	$	(7,933	)
Redeemable Class B Senior Preferred stock deemed dividend	—		(363		)	—		(1,836		)
Income (loss) attributable to common stockholders, from continuing operations	4,934		(5,966		)	7,105		(9,769		)
Income from discontinued operations, net of tax	40		90			208		341
Income (loss) attributable to common stockholders	$	4,974	$	(5,876	)	$	7,313	$	(9,428	)
Weighted average outstanding shares of common stock	25,733,833		19,813,209			25,713,688		15,718,667
Effect of dilutive securities:
Nonvested stock	357,177		—			359,941		—
Stock options	133,604		—			140,395		—
Restricted stock units	4,709		—			4,381		—
Weighted average shares and dilutive shares	26,229,323		19,813,209			26,218,405		15,718,667
Diluted EPS
Income (loss) from continuing operations	$	0.19	$	(0.30	)	$	0.27	$	(0.62	)
Income from discontinued operations	—		—			0.01		0.02
Net income (loss) per share	$	0.19	$	(0.30	)	$	0.28	$	(0.60	)

Schedule of anti-dilutive securities excluded from computation of earnings per share

The following table provides the securities that could potentially dilute basic earnings per share in the future, but were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Stock options	823,566	689,713	820,517	689,713
Nonvested stock	44,245	618,319	44,245	618,319
Restricted stock units	—	10,000	—	10,000

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Basis of Presentation

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The condensed consolidated balance sheet as of December 31, 2013 was derived from audited financial statements, but does not include all necessary disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed consolidated financial statements include all accounts of the Company and its subsidiaries and, in the opinion of management, include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These unaudited financial statements should be read in conjunction with the Company’s 2013 Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. All material intercompany accounts and transactions have been eliminated in consolidation.

Comprehensive income (loss)

Comprehensive income (loss) is equal to the net income (loss) for all periods presented.

Recently issued accounting pronouncements

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11"). The guidance requires entities to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss (“NOL”) carryforward or tax credit carryforward whenever the NOL or tax credit carryforward would be available to reduce the additional taxable income or tax due if the tax position is disallowed. This ASU requires entities to assess whether to net the unrecognized tax benefit with a deferred tax asset as of the reporting date. ASU 2013-11 became effective and was adopted by the Company in fiscal year 2014. As of September 30, 2014, the Company recognized $0.4 million of an unrecognized tax benefit as a reduction of its deferred tax asset for state tax NOL carryforwards in accordance with ASU 2013-11.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 provides a comprehensive revenue recognition model requiring companies to recognize revenue for the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 is effective for the Company's annual and interim periods beginning on January 1, 2017. Early application is not permitted. The guidance permits the use of either a retrospective or cumulative effect transition method. We have not yet selected a transition method and are currently evaluating the impact of the standard on our current accounting policies.

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Basis of Presentation Summary of Significant Accounting Policies (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014
Recently issued accounting pronouncements [Abstract]
Unrecognized tax benefit as a reduction of deferred tax asset	$ 0.4

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Income Taxes (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Income Tax Contingency [Line Items]
Valuation allowance	$ 1,700,000		$ 1,700,000		$ 1,900,000
Increase (decrease) in valuation allowance from continuing operations	100,000	200,000	200,000	200,000
Effective income tax rate reconciliation including discontinued operations	37.60%	(58.90%)	38.40%	(20.90%)
Income tax expense at statutory rate	35.00%	35.00%	35.00%	35.00%
Public offering transaction-related costs	60,000	9,322,000	508,000	10,008,000
Effective income tax rate on continuing operations	37.60%	(55.00%)	38.30%	(15.70%)
Accrued Expenses and Other Liabilities [Member]
Income Tax Contingency [Line Items]
Uncertain tax positions	2,900,000		2,900,000
Termination of Management Services Agreement [Member]
Income Tax Contingency [Line Items]
Public offering transaction-related costs		$ 9,000,000		$ 9,000,000

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 8,244	$ 1,138
Restricted assets	956	460
Accounts receivable, net	130,624	111,285
Inventories, net	114,748	91,303
Costs in excess of billings on uncompleted contracts	10,163	7,921
Assets held for sale	0	2,363
Prepaid expenses and other current assets	11,818	9,332
Deferred income taxes	5,561	3,332
Total current assets	282,114	227,134
Property and equipment, net of accumulated depreciation	71,085	56,039
Intangible assets, net of accumulated amortization	23,099	24,789
Goodwill	7,186	7,186
Restricted assets	861	1,359
Other assets	1,878	2,033
Total assets	386,223	318,540
Current liabilities
Accounts payable	89,167	64,984
Accrued expenses and other liabilities	40,693	30,528
Income taxes payable	5,704	2,989
Current portion of restructuring reserve	998	1,594
Current portion of capital lease obligation	1,676	1,240
Billings in excess of costs on uncompleted contracts	1,798	1,599
Total current liabilities	140,036	102,934
Revolving line of credit	81,816	59,072
Long-term portion of capital lease obligation	6,176	6,011
Deferred income taxes	13,695	15,496
Other long-term liabilities	7,548	7,346
Total liabilities	249,271	190,859
Commitments and contingencies (Note 9)
Stockholders' equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding at September 30, 2014 and December 31, 2013	0	0
Common stock, $0.01 par value, 300,000,000 shares authorized, 26,176,056 and 26,112,007 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively	262	261
Additional paid-in capital	146,527	144,570
Retained deficit	(9,837)	(17,150)
Total stockholders' equity	136,952	127,681
Total liabilities and stockholders' equity	$ 386,223	$ 318,540

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Segments (Reconciliation of adjusted EBITDA to consolidated financial statements) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting, Revenue Reconciling Item [Line Items]
Net income (loss), as reported	$ 4,974,000	$ (5,513,000)	$ 7,313,000	$ (7,592,000)
Interest expense	712,000	892,000	2,011,000	3,150,000
Income tax expense	2,972,000	1,989,000	4,417,000	1,076,000
Depreciation and amortization	3,298,000	3,032,000	9,744,000	9,058,000
Impairment of assets held for sale	0	0	48,000	0
Public offering transaction-related costs	60,000	9,322,000	508,000	10,008,000
Restructuring expense	2,000	31,000	11,000	130,000
Discontinued operations, net of taxes	(40,000)	(90,000)	(208,000)	(341,000)
Management fees	37,000	239,000	126,000	1,205,000
Non-cash compensation expense	868,000	309,000	1,848,000	573,000
Acquisition costs	0	0	0	257,000
Severance and other items related to store closures	325,000	229,000	440,000	721,000
Other reconciling items [Member] | Other reconciling items [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Depreciation and amortization	305,000	175,000	733,000	588,000
Adjusted EBITDA	(8,684,000)	(6,898,000)	(25,225,000)	(19,289,000)
Operating segments [Member] | Coleman Floor [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Depreciation and amortization	30,000	28,000	84,000	93,000
Adjusted EBITDA	208,000	581,000	(389,000)	1,405,000
Operating segments [Member] | Geographic divisions [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Depreciation and amortization	2,963,000	2,829,000	8,927,000	8,377,000
Adjusted EBITDA	$ 21,684,000	$ 16,757,000	$ 51,872,000	$ 36,129,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities
Net income (loss)	$ 7,313	$ (7,592)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation expense	8,054	7,389
Amortization of intangible assets	1,690	1,672
Amortization of debt issuance costs	353	465
Deferred income taxes	(4,030)	(3,723)
Non-cash stock compensation expense	1,848	573
Impairment of assets held for sale	96	0
Gain on sale of property, equipment and real estate	(1,076)	(270)
Bad debt expense	417	1,316
Change in assets and liabilities
Accounts receivable	(19,756)	(35,401)
Inventories, net	(23,445)	(20,598)
Accounts payable	26,951	14,735
Other assets and liabilities	6,396	6,904
Net cash provided by (used in) operating activities	4,811	(34,530)
Cash flows from investing activities
Purchases of property and equipment	(20,795)	(2,574)
Proceeds from sale of property, equipment and real estate	3,493	3,070
Change in restricted assets	2	3,223
Purchase of business	0	(2,373)
Net cash (used in) provided by investing activities	(17,300)	1,346
Cash flows from financing activities
Proceeds from revolving line of credit	1,046,220	961,160
Repayments of proceeds from revolving line of credit	(1,023,476)	(973,305)
Proceeds from issuance of common stock, net of offering costs	0	55,821
Other financing activities	(3,149)	(2,657)
Net cash provided by financing activities	19,595	41,019
Net increase in cash and cash equivalents	7,106	7,835
Cash and cash equivalents
Beginning of period	1,138	2,691
End of period	$ 8,244	$ 10,526

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Discontinued Operations (Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Current assets of discontinued operations	$ 0	$ 2,363
Discontinued Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Real estate held for sale	0	700
Prepaid expenses and other current assets	7	8
Current assets of discontinued operations	7	708
Accrued expenses and other liabilities	265	37
Current portion of restructuring reserve	141	295
Current liabilities of discontinued operations	406	332
Long-term portion of restructuring reserve	0	89
Long-term liabilities of discontinued operations	$ 0	$ 89

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Income Taxes (Policies)

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income taxes

Income Taxes

The Company evaluates its deferred tax assets quarterly to determine if valuation allowances are required. In assessing the realizability of deferred tax assets, the Company considers both positive and negative evidence in determining whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

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Restructuring Costs (Schedule of restructuring expenses) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Restructuring Reserve [Roll Forward]
Restructuring reserves, December 31, 2013	$ 3,602
Restructuring charges incurred	29
Cash payments	(1,495)
Restructuring reserves, September 30, 2014	2,136
Work force reductions [Member]
Restructuring Reserve [Roll Forward]
Restructuring reserves, December 31, 2013	190
Restructuring charges incurred	0
Cash payments	(129)
Restructuring reserves, September 30, 2014	61
Store closures [Member]
Restructuring Reserve [Roll Forward]
Restructuring reserves, December 31, 2013	3,412
Restructuring charges incurred	29
Cash payments	(1,366)
Restructuring reserves, September 30, 2014	$ 2,075

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Income (Loss) Per Common Share (Policies)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Income (loss) per common share

Income (Loss) Per Common Share

Basic net income (loss) per share (“EPS”) is calculated by dividing net income (loss) attributable to common stockholders by the weighted average shares outstanding during the period. Diluted EPS is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. For purposes of the diluted EPS calculation, stock options, nonvested stock and restricted stock unit awards are considered to be potential common shares. During periods of net income, participating securities are allocated a proportional share of net income determined by dividing total weighted average participating securities by the sum of total weighted average common shares and participating securities (“the two-class method”). During periods of net loss, no effect is given to participating securities since they do not share in the losses of the Company.

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Organization

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Stock Building Supply Holdings, Inc. and its subsidiaries (the “Company,” “we,” “us” and “our”) distributes lumber and building materials to new construction and repair and remodeling contractors. Additionally, we provide solution-based services to our customers, including component design, product specification and installation management services.

Due to the seasonal nature of our industry, sales are usually lower in the first and fourth quarters than in the second and third quarters.

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Stockholders' Equity:
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	300,000,000	300,000,000
Common stock, shares issued (in shares)	26,176,056	26,112,007
Common stock, shares outstanding (in shares)	26,176,056	26,112,007

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Segments

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segments

Segments

ASC 280, Segment Reporting, defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company's operating segments consist of the East and West divisions along with Coleman Floor, which offers professional flooring installation services. Due to the similar economic characteristics, nature of products, distribution methods and customers, the Company has aggregated our East and West operating segments into one reportable segment, "Geographic divisions."

In addition to our reportable segment, the Company's consolidated results include "Coleman Floor" and "Other reconciling items." Other reconciling items is comprised of our corporate activities.

The following tables present Net Sales, Adjusted EBITDA and certain other measures for the reportable segment and total continuing operations for the three and nine months endedSeptember 30, 2014 and 2013.

	Three Months Ended September 30, 2014									September 30,   2014
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA			Total Assets
Geographic divisions	$	338,998	$	81,844	$	2,963	$	21,684		$	350,891
Coleman Floor	15,062		2,548		30		208			9,966
Other reconciling items	—		—		305		(8,684		)	25,366
	$	354,060	$	84,392	$	3,298				$	386,223

	Three Months Ended September 30, 2013
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	315,918	$	72,908	$	2,829	$	16,757
Coleman Floor	12,550		2,473		28		581
Other reconciling items	—		—		175		(6,898		)
	$	328,468	$	75,381	$	3,032

	Nine Months Ended September 30, 2014
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	938,841	$	224,964	$	8,927	$	51,872
Coleman Floor	39,788		6,884		84		(389		)
Other reconciling items	—		—		733		(25,225		)
	$	978,629	$	231,848	$	9,744

	Nine Months Ended September 30, 2013
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	857,101	$	193,526	$	8,377	$	36,129
Coleman Floor	34,746		7,155		93		1,405
Other reconciling items	—		—		588		(19,289		)
	$	891,847	$	200,681	$	9,058

Reconciliation to consolidated financial statements:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2014			2013			2014			2013
Net income (loss), as reported	$	4,974		$	(5,513	)	$	7,313		$	(7,592	)
Interest expense	712			892			2,011			3,150
Income tax expense	2,972			1,989			4,417			1,076
Depreciation and amortization	3,298			3,032			9,744			9,058
Impairment of assets held for sale	—			—			48			—
Public offering transaction-related costs	60			9,322			508			10,008
Restructuring expense	2			31			11			130
Discontinued operations, net of taxes	(40		)	(90		)	(208		)	(341		)
Management fees	37			239			126			1,205
Non-cash compensation expense	868			309			1,848			573
Acquisition costs	—			—			—			257
Severance and other items related to store closures	325			229			440			721
Adjusted EBITDA of Coleman Floor	(208		)	(581		)	389			(1,405		)
Adjusted EBITDA of other reconciling items	8,684			6,898			25,225			19,289
Adjusted EBITDA of geographic divisions reportable segment	$	21,684		$	16,757		$	51,872		$	36,129

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Oct. 27, 2014
Document And Entity Information [Abstract]
Entity Registrant Name	Stock Building Supply Holdings, Inc.
Entity Central Index Key	0001574815
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		26,176,056

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Income (Loss) Per Common Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Income (loss) per common share

Income (Loss) Per Common Share

Basic net income (loss) per share (“EPS”) is calculated by dividing net income (loss) attributable to common stockholders by the weighted average shares outstanding during the period. Diluted EPS is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. For purposes of the diluted EPS calculation, stock options, nonvested stock and restricted stock unit awards are considered to be potential common shares. During periods of net income, participating securities are allocated a proportional share of net income determined by dividing total weighted average participating securities by the sum of total weighted average common shares and participating securities (“the two-class method”). During periods of net loss, no effect is given to participating securities since they do not share in the losses of the Company.

The basic and diluted EPS calculations for the three and nine months endedSeptember 30, 2014 and 2013 are presented below:

Basic EPS

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands, except share and per share amounts)	2014		2013			2014		2013
Income (loss) from continuing operations	$	4,934	$	(5,603	)	$	7,105	$	(7,933	)
Redeemable Class B Senior Preferred stock deemed dividend	—		(363		)	—		(1,836		)
Income (loss) attributable to common stockholders, from continuing operations	4,934		(5,966		)	7,105		(9,769		)
Income from discontinued operations, net of tax	40		90			208		341
Income (loss) attributable to common stockholders	$	4,974	$	(5,876	)	$	7,313	$	(9,428	)
Weighted average outstanding shares of common stock	25,733,833		19,813,209			25,713,688		15,718,667
Basic EPS
Income (loss) from continuing operations	$	0.19	$	(0.30	)	$	0.27	$	(0.62	)
Income from discontinued operations	—		—			0.01		0.02
Net income (loss) per share	$	0.19	$	(0.30	)	$	0.28	$	(0.60	)

Diluted EPS

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands, except share and per share amounts)	2014		2013			2014		2013
Income (loss) from continuing operations	$	4,934	$	(5,603	)	$	7,105	$	(7,933	)
Redeemable Class B Senior Preferred stock deemed dividend	—		(363		)	—		(1,836		)
Income (loss) attributable to common stockholders, from continuing operations	4,934		(5,966		)	7,105		(9,769		)
Income from discontinued operations, net of tax	40		90			208		341
Income (loss) attributable to common stockholders	$	4,974	$	(5,876	)	$	7,313	$	(9,428	)
Weighted average outstanding shares of common stock	25,733,833		19,813,209			25,713,688		15,718,667
Effect of dilutive securities:
Nonvested stock	357,177		—			359,941		—
Stock options	133,604		—			140,395		—
Restricted stock units	4,709		—			4,381		—
Weighted average shares and dilutive shares	26,229,323		19,813,209			26,218,405		15,718,667
Diluted EPS
Income (loss) from continuing operations	$	0.19	$	(0.30	)	$	0.27	$	(0.62	)
Income from discontinued operations	—		—			0.01		0.02
Net income (loss) per share	$	0.19	$	(0.30	)	$	0.28	$	(0.60	)

The following table provides the securities that could potentially dilute basic earnings per share in the future, but were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Stock options	823,566	689,713	820,517	689,713
Nonvested stock	44,245	618,319	44,245	618,319
Restricted stock units	—	10,000	—	10,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Statement [Abstract]
Net sales	$ 354,060	$ 328,468	$ 978,629	$ 891,847
Cost of goods sold	269,668	253,087	746,781	691,166
Gross profit	84,392	75,381	231,848	200,681
Selling, general and administrative expenses	73,665	66,931	211,878	188,458
Depreciation expense	1,681	1,456	4,790	4,716
Amortization expense	563	563	1,690	1,672
Impairment of assets held for sale	0	0	48	0
Public offering transaction-related costs	60	9,322	508	10,008
Restructuring expense	2	31	11	130
Total operating expenses	75,971	78,303	218,925	204,984
Income (loss) from operations	8,421	(2,922)	12,923	(4,303)
Other income (expense)
Interest expense	(712)	(892)	(2,011)	(3,150)
Other income, net	197	200	610	596
Income (loss) from continuing operations before income taxes	7,906	(3,614)	11,522	(6,857)
Income tax expense	(2,972)	(1,989)	(4,417)	(1,076)
Income (loss) from continuing operations	4,934	(5,603)	7,105	(7,933)
Income from discontinued operations, net of income tax expense of $25, $54, $133 and $237, respectively	40	90	208	341
Net income (loss)	4,974	(5,513)	7,313	(7,592)
Redeemable Class B Senior Preferred stock deemed dividend	0	(363)	0	(1,836)
Income (loss) attributable to common stockholders	$ 4,974	$ (5,876)	$ 7,313	$ (9,428)
Weighted average common shares outstanding
Basic (in shares)	25,733,833	19,813,209	25,713,688	15,718,667
Diluted (in shares)	26,229,323	19,813,209	26,218,405	15,718,667
Basic income (loss) per share
Income (loss) from continuing operations (in dollars per share)	$ 0.19	$ (0.30)	$ 0.27	$ (0.62)
Income from discontinued operations (in dollars per share)	$ 0.00	$ 0.00	$ 0.01	$ 0.02
Net income (loss) per share (in dollars per share)	$ 0.19	$ (0.30)	$ 0.28	$ (0.60)
Diluted income (loss) per share
Income (loss) from continuing operations (in dollars per share)	$ 0.19	$ (0.30)	$ 0.27	$ (0.62)
Income from discontinued operations (in dollars per share)	$ 0.00	$ 0.00	$ 0.01	$ 0.02
Net income (loss) per share (in dollars per share)	$ 0.19	$ (0.30)	$ 0.28	$ (0.60)

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Accounts Receivable

9 Months Ended

Sep. 30, 2014

Receivables [Abstract]

Accounts Receivable

Accounts Receivable

Accounts receivable consist of the following at September 30, 2014 and December 31, 2013:

(in thousands)	September 30,   2014			December 31,   2013
Trade receivables	$	135,556		$	115,876
Allowance for doubtful accounts	(2,501		)	(2,707		)
Allowance for sales returns and discounts	(2,431		)	(1,884		)
	$	130,624		$	111,285

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Restructuring Costs

9 Months Ended

Sep. 30, 2014

Restructuring and Related Activities [Abstract]

Restructuring costs

Restructuring Costs

In addition to discontinuing operations in certain markets, the Company instituted store closures and reductions in headcount in continuing markets (collectively, the “Restructurings”) in certain prior years in an effort to: (i) strengthen the Company’s competitive position; (ii) reduce costs and (iii) improve operating margins within existing markets that management believes have favorable long-term growth demographics. No additional costs, other than interest accretion, are expected to be incurred related to the Restructurings.

The following table summarizes the restructuring expenses incurred in connection with the Restructurings and the remaining reserves as of September 30, 2014:

(in thousands)	Work Force Reductions			Store Closures			Total
Restructuring reserves, December 31, 2013	$	190		$	3,412		$	3,602
Restructuring charges incurred	—			29			29
Cash payments	(129		)	(1,366		)	(1,495		)
Restructuring reserves, September 30, 2014	$	61		$	2,075		$	2,136

The remaining accrual for work force reduction of $0.1 million is expected to be fully paid by January 2015. The remaining accrual for store closures of $2.1 million is expected to be fully paid by January 2017 as the related leases expire.

The restructuring reserve at September 30, 2014 consists of a current portion of $1.0 million and a long-term portion of $1.1 million. The long-term portion is included in other long-term liabilities on the consolidated balance sheets.

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Commitments and Contingencies (Policies)

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

Commitments and Contingencies

From time to time, various claims, legal proceedings and litigation are asserted or commenced against the Company principally arising from alleged product liability, warranty, casualty, construction defect, contract, tort, employment and other disputes. In determining loss contingencies, management considers the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when it is considered probable that such a liability has been incurred and when the amount of loss can be reasonably estimated.

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Subsequent Events

9 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

During October 2014, the Company entered into a contract to purchase a facility that it currently leases. Of the $14.8 million total purchase price, $0.8 million was paid as a deposit in October 2014 with the balance due upon closing of the transaction, which is expected to occur in the fourth quarter of 2014 or the first quarter of 2015. The deposit is fully refundable through the end of the Company's inspection period and partially refundable thereafter until the closing, at which time the entire deposit will be applied to the purchase price.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

Commitments and Contingencies

From time to time, various claims, legal proceedings and litigation are asserted or commenced against the Company principally arising from alleged product liability, warranty, casualty, construction defect, contract, tort, employment and other disputes. In determining loss contingencies, management considers the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when it is considered probable that such a liability has been incurred and when the amount of loss can be reasonably estimated. It is not certain that the Company will prevail in these matters. However, the Company does not believe that the ultimate outcome of any pending matters will have a material adverse effect on its consolidated financial position, results of operations or cash flows.

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Secured Credit Agreement

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Secured Credit Agreement

Secured Credit Agreement

On June 30, 2009, the Company entered into a Secured Credit Agreement (the “Credit Agreement”) with Wells Fargo Capital Finance ("WFCF"), which includes a revolving line of credit (the “Revolver”). The Revolver was amended during 2013 and 2014 for changes in financial covenants, maximum availability, maturity date and interest rate. The following is a summary of the significant terms of the Revolver as of September 30, 2014:

Maturity	December 31, 2017
Interest/Usage Rate	Company’s option of Base Rate(a) plus a Base Rate Margin (ranges from 0.50%–1.00% based on Revolver availability) or London Inter Bank Offered Rate ("LIBOR") plus a LIBOR Rate Margin (ranges from 1.50%–2.00% based on Revolver availability)
Maximum Availability	Lesser of $200 million or the borrowing base(b)
Periodic Principal Payments	None

(a) Base Rate is the higher of (i) the Federal Funds Rate plus 0.5% or (ii) the prime rate.

(b) The Revolver’s borrowing base is calculated as the sum of (i) 85% of the Company’s eligible accounts receivable plus (ii) the lesser of 90% of the eligible credit card receivables and $5 million plus (iii) the lesser of $150 million, 65% of the eligible inventory or 85% of the net liquidation value of eligible inventory as defined in the Credit Agreement plus (iv) the lesser of $30 million, 85% of the net liquidation value of eligible fixed assets or the net book value of fixed assets, all as defined in the Credit Agreement, minus (v) reserves from time to time set by the administrative agent. The Company’s borrowing base can also be increased pursuant to certain terms outlined in the Credit Agreement.

The Credit Agreement provides that the Company can use the Revolver availability to issue letters of credit. The fees on any outstanding letters of credit issued under the Revolver include a participation fee equal to the LIBOR Rate Margin. The fee on the unused portion of the Revolver is 0.25%. The Revolver includes a financial covenant that requires the Company to maintain a minimum Fixed Charge Coverage Ratio of 1.00:1.00 as defined by the Credit Agreement. The Fixed Charge Coverage Ratio requirement is only applicable if the sum of (i) availability under the Revolver and (ii) qualified cash ("Adjusted Liquidity") is less than $20 million, and remains in effect until the date on which Adjusted Liquidity has been greater than or equal to $20 million for a period of 30 consecutive days. While there can be no assurances, based upon the Company’s forecast, the Company does not expect the financial covenants to become applicable during the year ending December 31, 2014.

The Company had outstanding borrowings of $81.8 million and $59.1 million with net availability of $100.4 million and $71.0 million as of September 30, 2014 and December 31, 2013, respectively. The interest rate on outstanding LIBOR Rate borrowings of $81.0 million was 1.7% and the interest rate on outstanding Base Rate borrowings of $0.8 million was 3.8% as of September 30, 2014. The interest rate on outstanding LIBOR Rate borrowings of $52.0 million was 1.9% and the interest rate on outstanding Base Rate borrowings of $7.1 million was 4.0% as of December 31, 2013. The Company had $9.2 million and $8.9 million in letters of credit outstanding under the Credit Agreement as of September 30, 2014 and December 31, 2013, respectively. The Revolver is collateralized by substantially all assets of the Company. The carrying value of the Revolver at September 30, 2014 and December 31, 2013 approximates fair value as the Revolver contains a variable interest rate. As such, the fair value of the Revolver was classified as a Level 2 measurement in accordance with ASC 820.

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Income Taxes

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income taxes

Income Taxes

The Company evaluates its deferred tax assets quarterly to determine if valuation allowances are required. In assessing the realizability of deferred tax assets, the Company considers both positive and negative evidence in determining whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company recognized valuation allowances of $1.7 million and $1.9 million against its deferred tax assets related to certain state tax jurisdictions as of September 30, 2014 and December 31, 2013, respectively. During the three and nine months endedSeptember 30, 2014, the Company reduced its valuation allowances by $0.1 million and $0.2 million, respectively, against deferred tax assets related to continuing operations. During the three and nine months endedSeptember 30, 2013, the Company recorded additional valuation allowances of $0.2 million against deferred tax assets related to continuing operations. To the extent the Company generates sufficient taxable income in the future to utilize the tax benefits of the net deferred tax assets on which a valuation allowance is recorded, the effective tax rate may decrease as the valuation allowance is reversed. The Company is not permitted to carry back any of its existing tax net operating losses related to certain state tax jurisdictions; therefore, to the extent the Company generates future tax net operating losses, the Company may be required to increase the valuation allowance on net deferred tax assets, which may increase the effective tax rate.

For the three and nine months endedSeptember 30, 2014, the Company’s effective income tax rate including discontinued operations and other discrete items was 37.6% and 38.4%, respectively, which varied from the federal statutory rate of 35% primarily due to state taxes. For the three and nine months endedSeptember 30, 2013, the Company’s effective income tax rate including discontinued operations and other discrete items was (58.9)% and (20.9)%, respectively, which varied from the federal statutory rate of 35% primarily due to the non-deductibility of the termination fee of $9.0 million related to our management services agreement with The Gores Group, LLC (“Gores”) (the "Gores Termination Fee") and of certain capitalized costs.

The effective income tax rate on continuing operations for the three months ended September 30, 2014 was 37.6% compared to an effective income tax rate on continuing operations of (55.0)% for the three months ended September 30, 2013. The effective income tax rate on continuing operations for the nine months endedSeptember 30, 2014 was 38.3% compared to an effective income tax rate on continuing operations of (15.7)% for the nine months endedSeptember 30, 2013. The increase in the tax rates for the comparative three-month and nine-month periods is primarily due to the adverse effect of the non-deductible Gores Termination Fee and of certain capitalized costs creating tax expense against the Company's pre-tax losses for the three months and nine months ended September 30, 2013.

As of September 30, 2014, the Company has recognized a liability for uncertain tax positions of $2.9 million within accrued expenses and other liabilities on the condensed consolidated balance sheets related to the deductibility of certain management service fees. The Company anticipates that it is reasonably possible that the total unrecognized tax benefits may be settled and recognized within the next twelve months, which could impact the effective tax rate. The Company did not have material uncertain tax positions as of December 31, 2013.

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Stock Based Compensation

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock based compensation

Stock Based Compensation

The following table highlights the expense related to stock based compensation for the three and nine months endedSeptember 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2014		2013		2014		2013
Nonvested stock	$	263	$	171	$	651	$	307
Stock options	537		129		1,072		257
Restricted stock units	68		9		125		9
Stock based compensation	$	868	$	309	$	1,848	$	573

The following is a summary of nonvested stock, restricted stock unit and stock option activity for the nine months endedSeptember 30, 2014:

	Nonvested Stock				Restricted Stock Units				Stock Options
	Number of Shares Outstanding		Weighted Average Grant Date Fair Value		Number of Units Outstanding		Weighted Average Grant Date Fair Value		Number of Options Outstanding		Weighted Average Exercise Price
December 31, 2013	427,993		$	15.72	10,000		$	13.96	714,484		$	9.98
Granted	44,245		20.34		11,124		18.39		362,939		20.29
Vested/exercised	(35,566	)	4.62		(5,000	)	13.96		(14,804	)	0.97
Forfeited	—		—		—		—		(27,000	)	14.00
September 30, 2014	436,672		$	17.09	16,124		$	17.02	1,035,619		$	13.62

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Discontinued Operations (Income Statement) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income tax expense	$ (25)	$ (54)	$ (133)	$ (237)
Income from discontinued operations, net of tax	40	90	208	341
Discontinued Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net sales	0	0	0	0
Restructuring charges	(3)	(7)	(18)	(25)
Gain before income taxes	65	144	341	578
Income tax expense	(25)	(54)	(133)	(237)
Income from discontinued operations, net of tax	$ 40	$ 90	$ 208	$ 341

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Acquisitions (Policies)

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Acquisitions

Acquisitions

For all acquisitions, the Company allocates the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition. The market approach, which indicates value based on available market pricing for comparable assets, is utilized to estimate the fair value of inventory, property and equipment. The income approach, which indicates value based on the present value of future cash flows, is primarily used to value intangible assets. The cost approach, which estimates values by determining the current cost of replacing an asset with another of equivalent utility, is used, as appropriate, for certain assets for which the market and income approaches could not be applied due to the nature of the asset.

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Restructuring Costs (Tables)

9 Months Ended

Sep. 30, 2014

Restructuring and Related Activities [Abstract]

Schedule of restructuring expenses

The following table summarizes the restructuring expenses incurred in connection with the Restructurings and the remaining reserves as of September 30, 2014:

(in thousands)	Work Force Reductions			Store Closures			Total
Restructuring reserves, December 31, 2013	$	190		$	3,412		$	3,602
Restructuring charges incurred	—			29			29
Cash payments	(129		)	(1,366		)	(1,495		)
Restructuring reserves, September 30, 2014	$	61		$	2,075		$	2,136

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Subsequent Events (Details) (Subsequent Event [Member], USD $) In Millions, unless otherwise specified	1 Months Ended
	Oct. 31, 2014
Subsequent Event [Member]
Subsequent Event [Line Items]
Subsequent event description	contract to purchase a facility that it currently leases
Purchase price	$ 14.8
Deposit	$ 0.8

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Stock Based Compensation (Stock based compensation expense) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	$ 868	$ 309	$ 1,848	$ 573
Nonvested stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	263	171	651	307
Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	537	129	1,072	257
Restricted stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	$ 68	$ 9	$ 125	$ 9

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Statement [Abstract]
Discontinued operations, income tax expense	$ 25	$ 54	$ 133	$ 237

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Discontinued Operations

9 Months Ended

Sep. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued operations

Discontinued Operations

During certain prior years, the Company ceased operations in certain geographic markets. The Company will have no further significant continuing involvement in sold operations and exited geographic markets. The cessation of operations in these markets has been treated as discontinued operations as the markets had distinguishable cash flows and operations that have been eliminated from ongoing operations. To determine if cash flows have been (or will be) eliminated from ongoing operations, we evaluate a number of qualitative and quantitative factors, including, but not limited to, proximity of a closing store to any remaining open stores and the potential sales migration from the closed store to any stores remaining open.

The operating results of the discontinued operations for the three and nine months endedSeptember 30,2014 and 2013 are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2014			2013			2014			2013
Net sales	$	—		$	—		$	—		$	—
Restructuring charges	(3		)	(7		)	(18		)	(25		)
Gain before income taxes	65			144			341			578
Income tax expense	(25		)	(54		)	(133		)	(237		)
Net income	40			90			208			341

The assets and liabilities of discontinued operations reflected on the consolidated balance sheets at September 30, 2014 and December 31, 2013 are as follows:

(in thousands)	September 30,   2014		December 31,   2013
Real estate held for sale	$	—	$	700
Prepaid expenses and other current assets	7		8
Current assets of discontinued operations	7		708
Accrued expenses and other liabilities	265		37
Current portion of restructuring reserve	141		295
Current liabilities of discontinued operations	406		332
Long-term portion of restructuring reserve	—		89
Long-term liabilities of discontinued operations	$	—	$	89

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Accounts Receivable (Tables)

9 Months Ended

Sep. 30, 2014

Receivables [Abstract]

Schedule of accounts receivable

Accounts receivable consist of the following at September 30, 2014 and December 31, 2013:

(in thousands)	September 30,   2014			December 31,   2013
Trade receivables	$	135,556		$	115,876
Allowance for doubtful accounts	(2,501		)	(2,707		)
Allowance for sales returns and discounts	(2,431		)	(1,884		)
	$	130,624		$	111,285

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Accounts Receivable (Accounts Receivable) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Receivables [Abstract]
Trade receivables	$ 135,556	$ 115,876
Allowance for doubtful accounts	(2,501)	(2,707)
Allowance for sales returns and discounts	(2,431)	(1,884)
Accounts receivable, net	$ 130,624	$ 111,285

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation

Basis of Presentation

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The condensed consolidated balance sheet as of December 31, 2013 was derived from audited financial statements, but does not include all necessary disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed consolidated financial statements include all accounts of the Company and its subsidiaries and, in the opinion of management, include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These unaudited financial statements should be read in conjunction with the Company’s 2013 Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. All material intercompany accounts and transactions have been eliminated in consolidation.

Comprehensive income (loss)

Comprehensive income (loss)

Comprehensive income (loss) is equal to the net income (loss) for all periods presented.

Recently issued accounting pronouncements

Recently issued accounting pronouncements

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11"). The guidance requires entities to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss (“NOL”) carryforward or tax credit carryforward whenever the NOL or tax credit carryforward would be available to reduce the additional taxable income or tax due if the tax position is disallowed. This ASU requires entities to assess whether to net the unrecognized tax benefit with a deferred tax asset as of the reporting date. ASU 2013-11 became effective and was adopted by the Company in fiscal year 2014. As of September 30, 2014, the Company recognized $0.4 million of an unrecognized tax benefit as a reduction of its deferred tax asset for state tax NOL carryforwards in accordance with ASU 2013-11.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 provides a comprehensive revenue recognition model requiring companies to recognize revenue for the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 is effective for the Company's annual and interim periods beginning on January 1, 2017. Early application is not permitted. The guidance permits the use of either a retrospective or cumulative effect transition method. We have not yet selected a transition method and are currently evaluating the impact of the standard on our current accounting policies.